Closely-anticipated U.S. inflation figures are easing concerns about runaway price growth and helping U.S. and global stocks notch up yet more record highs.
Wednesday’s 0.5% reading for the consumer price index in July was the largest drop in month-to-month inflation in 15 months and has some investors starting to bet long-feared inflation on the back of pandemic-era stimulus may be peaking. U.S. Treasury yields fell, erasing some of this month’s surge.
The reading certainly eases pressure on the Federal Reserve by supporting its assertion than inflation rises are temporary and gives the central bank more time to decide when to taper asset purchases. It also gives ammunition to bulls determined to push stocks higher.
On Thursday markets looked set to take a breather, with both U.S. and European stock futures flat or down slightly.
U.S. 10-year Treasury yields held above 1.3% — while inflation fears may be receding for now, the benchmark yield is still nearly 20 basis points higher than in early August.
Elsewhere, data showed that Britain’s economy grew by a faster-than expected 1.0% in June, boosted by the huge services sector.