WS #15885
The US CPI reading of 3.7% has shattered hopes for a soft landing, forcing the market to price in a high probability of an October rate hike. This has triggered a broad risk-off environment, with the Nasdaq falling 1.54% and the 10-year Treasury yield testing 5.5%. The macro backdrop is now dominated by the fear that the Fed will keep rates higher for longer to combat sticky energy-driven inflation, weighing heavily on high-multiple growth stocks and real estate.
Hawkish Macro & Rate Hike Fears
The US CPI reading of 3.7% has shattered hopes for a soft landing, forcing the market to price in a high probability of an October rate hike. This has triggered a broad risk-off environment, with the Nasdaq falling 1.54% and the 10-year Treasury yield testing 5.5%. The macro backdrop is now dominated by the fear that the Fed will keep rates higher for longer to combat sticky energy-driven inflation, weighing heavily on high-multiple growth stocks and real estate.