WS #15904
The latest US CPI data came in higher than expected, signaling that inflation remains sticky despite prior rate cuts. This has reignited fears of a hawkish Federal Reserve pivot, causing bond yields to rise and equity valuations to compress. The market reaction was immediate and global, with the Nikkei 225 suffering its worst day since July and European banks sliding as investors repriced the probability of further tightening.
US Inflation and Fed Policy
The latest US CPI data came in higher than expected, signaling that inflation remains sticky despite prior rate cuts. This has reignited fears of a hawkish Federal Reserve pivot, causing bond yields to rise and equity valuations to compress. The market reaction was immediate and global, with the Nikkei 225 suffering its worst day since July and European banks sliding as investors repriced the probability of further tightening.