Bonds & Stocks
Wall Street saw a relief rally after cooler-than-estimated data reinforced trader conviction that the Federal Reserve will cut rates next week. Equities climbed in early US trading, with the S&P 500 set to open at alltime highs on speculation that policy easing will keep powering corporate earnings. Treasuries got a fresh injection of optimism, with bonds rising across the curve as money markets priced in a high likelihood of two rate reductions before the year is over.
Economy
The core consumer price index, excluding the often volatile food and energy categories, increased 0.2% from August, according to Bureau of Labor Statistics data out Friday. That was the slowest pace in three months. On an annual basis, it advanced 3%. The lower-than-expected reading is a welcome surprise, especially for several Fed officials who are leery of cutting rates further. While the central bank was already widely expected to lower borrowing costs at its meeting next week, the report may help convince policymakers that they can do so again in December.
World
France’s Socialist Party said it’s prepared to bring down the fragile minority government as soon as next week if there is no significant increase in taxation in next year’s budget. The center-left party is demanding another €15 billion ($17.4 billion) to €20 billion in taxes in the 2026 budget that will be debated at the National Assembly later Friday. Without support from Socialists, who hold leverage in the lower house of parliament, Prime Minister Sebastien Lecornu’s government would likely fall in no-confidence motions.