I worry about complacency. Fiscal room for manoeuvre is thin across the developed world, and the toolkit that helped during the financial crisis-large‑scale QE, in particular-can't be mobilised in the same way again. Yields have risen sharply but mostly in an orderly fashion; we've not had many "cliff‑edge" moments outside Japan. That doesn't mean we're safe. If market participants decide they will only finance governments at much higher rates, the spiral can be vicious. We're vulnerable to that kind of shift in sentiment.
US equities advanced as the S&P 500 and Nasdaq reached record levels, driven by hopes for Federal Reserve rate cuts and soft consumer price data.
