(Bloomberg) — US equity futures slipped as a fresh batch of soft inflation data raised the likelihood of speedy interest-rate cuts, but also underscored the risk of an economic downturn.
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The caution on equities contrasts with exuberant bond markets, which received a fresh impetus Wednesday from data showing a slowdown in UK inflation. British 10-year debt yields dropped as much as 11 basis points, while German 10-year borrowing costs dropped below 2% for the first time in nine months.
The moves ripped into US Treasury markets, knocking 10-year yields some five basis points lower, down more than 40 basis points already this month.
However, futures on the Nasdaq 100 shed 0.3% while those on the S&P 500 eased by a similar amount. While traders now see more than 150 basis points of Federal Reserve rate cuts in 2024 — about 10 basis points more than on Tuesday — they are starting to balance rate-cut optimism…
