Global Markets Shift to Hawkish Stance Amid Rising Inflation

This week's macro summary for August 24-30, 2026, showed global markets shifting towards 'resurgent inflation, major central banks turning hawkish again, growth resilience coexisting with policy tightening risks.'

The US experienced higher-than-expected inflation rates in July PCE data, with both headline and core PCE rising 0.2% month-over-month, year-over-year readings of approximately 3.7% and 3.3%, respectively. Fed Chair Kevin Warsh stated that 'inflation remains too high,' indicating that recent data is insufficient to prove a substantive improvement in the underlying inflation trend.

The European Central Bank faces similar pressures with Eurozone inflation rising to approximately 3.3% year-over-year in August, driven primarily by energy prices. The overall macro environment has clearly shifted from earlier expectations of rate cuts towards a repricing of 'higher rates for longer or even further hikes.'

Next week's forecast is critical, with US employment data validation being the main variable. Markets will focus on JOLTS job openings, ADP employment, ISM, and the August non-farm payrolls report.