London — European stock indexes fell on Friday and the US 10-year yield held close to 2% after red-hot US inflation data that prompted investors to expect tighter monetary policy from the Federal Reserve.
Wall Street stocks fell after the data and the weakness continued through the Asian session. The MSCI world equity index , which tracks shares in 50 countries, was down 0.4% on the day at 8.50am GMT. “You have all these cost-push factors on one side and then you’ve got booming demand hitting this constrained supply — it’s very hard to see how inflation could slow down any time soon in the US .”
These comments were more dovish than the tone at the ECB meeting last week, when Lagarde surprised markets by opening the door to the first ECB rate hike in more than a decade to curb record-high inflation.