World stocks hit yet another record high on Tuesday, with European stocks poised for their longest winning streak since 2019 as investors bet likely transitory inflation pressures will stay the U.S. Federal Reserves hand from signalling a shift in policy settings.
A majority of investors surveyed by BofA said inflation was transitory, a marked change from March, when worries about more sustained price rises had sent U.S. 10year Treasury yields surging to nearly 1.8. With the yield now pinned below 1.5, BofA expects the Fed to signal a dial back in stimulus by September.
Abating worries about inflation helped U.S. and European shares scale new highs, with the panregional STOXX 600 rising 0.3, its eighth straight day of gains. U.S. stock futures were up 0.1. .EU .N
Several factors that have pushed up inflation are likely to fade in the coming months, said Mark Haefele, chief investment officer at UBS Global Wealth. We dont expect inflation to prompt a premature tightening of monetary policy or to derail the equity rally.
The twoday Federal Open Market Committee FOMC meeting starts on Tuesday, with a final statement published after the meeting of the Feds monetary policymaking body ends on Wednesday.
Traders around the world are looking for any hints about whether and when the Fed plans to taper its bondbuying programme as the U.S. economy bounces back from the pandemic fallout.
Nearly 60 of economists in a Reuters poll expect a taper announcement will come in the…