Global Markets Breathe Sigh of Relief as Oil Prices Dip Amid Inflation Worries
The global equity market experienced a temporary reprieve from its recent selloff on Friday as oil prices dropped, despite a sharp rise in US consumer inflation.
A report by the Bureau of Labor Statistics revealed that the Consumer Price Index (CPI) increased by 0.4% last month, up from 0.1% in July.
This surge in inflation has led traders to speculate on a potential rate hike at the Federal Reserve's upcoming meeting, with market predictions jumping from 67% to 85% for a quarter-point increase, according to David Rees of Schroders.
The increased bets on a rate hike come as global bond yields surged due to inflation concerns and tensions over the Strait of Hormuz. However, oil prices retreated following diplomatic efforts in the Middle East to manage shipping through the contested waterway.