- Global bond markets sold off as investors grew concerned about inflation and signs the US economy is running too hot.
- US unemployment at 4.1% and above-trend growth signal modest overheating, putting the Federal Reserve on notice for potential rate hikes.
- September flash PMI showed US activity expanding at the fastest pace in more than five years, with new orders fastest since April 2022 and manufacturing hiring strongest since February 2021.
- Massive AI investment and resilient consumer spending outweighed energy-price-led worries, supporting the strong activity reading.
Quotes
“Trouble is brewing in the bond markets again, as investors grow more concerned about inflation, and signs that the US economy may be running too hot.”
“With unemployment at 4.1% and growth running above trend, the US economy is showing signs of modest overheating.”