European stocks fall, bonds stronger after Fed flags weak US inflation
London — European stocks and bond yields fell in early trade on Thursday after the Federal Reserve expressed concern over weak US inflation, a trend which has clouded the outlook for the world’s largest economy. Some policy makers argued against future rate rises until there was more concrete evidence that inflation was moving back toward the Fed’s objective, according to minutes of the US central bank’s last policy meeting. Money market futures are now pricing in about a 40% chance the Fed will raise rates by December, compared with just under 50% before the Fed’s minutes. The pan-European Stoxx 600 index was down 0.2%, snapping a three-day winning streak and tracking earlier moves from the US S&P 500 that fell after the minutes. Germany’s DAX, France’s CAC 40 and the UK’s FTSE 100 all fell 0.1%. The prospect of slower removal of stimulus gave support to fixed income assets with European government bond yields, which move inversely to prices, heading lower. The benchmark German 10-...
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