WS #15141
US PCE inflation data missed forecasts, showing softer price pressures despite accelerating consumer spending. Coupled with the Federal Reserve's decision to finalize stress test changes that boost bank lending, the market has priced out fears of an October rate hike. This policy relief has supported a broad equity rally, although the underlying threat of an oil-driven inflation shock remains a key risk for global bonds.
Fed Policy and Inflation Dynamics
US PCE inflation data missed forecasts, showing softer price pressures despite accelerating consumer spending. Coupled with the Federal Reserve's decision to finalize stress test changes that boost bank lending, the market has priced out fears of an October rate hike. This policy relief has supported a broad equity rally, although the underlying threat of an oil-driven inflation shock remains a key risk for global bonds.