Markets keep betting on Fed rate cuts, but inflation may not cooperate. Analysts at warn that U.S. PCE inflation could stay above 3.5% while core inflation remains over 3% — far from the Fed’s 2% target.
A resilient labor market, sticky services inflation, and rising energy risks tied to the could force the Federal Reserve to keep rates higher for longer.
If inflation keeps surprising to the upside, the era of easy money may not return anytime soon. That could mean continued pressure across stocks, crypto, bonds, and global markets.
