Global Stocks Sink As Bond Yields Surge On Inflation Fears

June S&P 500 futures (ESM22) this morning are down sharply by -2.13% at a 3-month low.  Global equity markets are sinking today..

on concern that soaring inflation will prompt the Fed to be more aggressive in tightening monetary policy, which will slow economic growth and possibly spark a recession.

The 10-year T-note yield surged to an 11-year high today of 3.282%. T-note yields continue to climb and weigh on stocks on negative carry-over..

from last Friday’s U.S. consumer price report, which showed that the headline May CPI rose to a new 40-year high of 8.6% y/y.

The markets are expecting the FOMC to raise the target on the fed funds range by 50 bp after its two-day policy meeting this Tue/Wed.

The markets will also look to the FOMC’s inflation and long-term growth forecasts and comments from Fed Chair Powell to see if the Fed will be more aggressive in tightening monetary policy.

European stocks are falling today, with the Euro Stoxx 50 down sharply by -2.26% at a 3-month low.

Concern that aggressive tightening by the Fed and ECB could cause a recession is weighing on stocks..

Stocks also came under pressure today on comments from ECB Governing Council member Kazimir who said, "economic growth in the Eurozone is set to be weak for several quarters."

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