HSBC: Strong U.S. inflation may not be bad news for stock market gains

According to Jinshi, HSBC strategists said that firm U.S. inflation this year is not necessarily bad news for stock market gains, as rising yields reflect strong economic growth. The team led by Max Kettner said that current price pressures are different from those in 2021 and 2022, when inflation was mainly supply-driven. "If the Fed's rate cut policy is more like the readjustment in the mid-1990s and 2019, it may not be bad news for risky assets," they wrote in a report. They also said that long-term high interest rates could be self-defeating and will "eventually" lead to a recession, but they do not fully believe these concerns.