Bonds & Stocks
Treasuries climbed across the curve, driving two-year yields down three basis points to 3.51%. Money markets almost fully priced in three Fed reductions by the end of 2025, starting next week. Gains in equities drove the S&P 500 to fresh all-time highs. European yields rose after the central bank signaled growth risks are more balanced, indicating the rate-cut cycle is over.
Economy
Underlying US inflation rose as expected in August, keeping the Federal Reserve on track to cut interest rates next week. The core consumer price index, excluding the often volatile food and energy categories, increased 0.3% from July, according to Bureau of Labor Statistics data out Thursday. When incorporating those components, the overall CPI rose 0.4%, the most since the start of the year.
World
Turkey delivered a sizable interest-rate cut on Thursday, with the central bank sticking to a faster pace and defying Wall Street’s expectations of a more significant slowdown. The Monetary Policy Committee slashed the one-week repo rate to 40.5% from 43%, more than the 200 basis-point cut investors had expected, according to the median forecast in a Bloomberg survey.