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Aug 18, 2025
Hidden inflation puts markets at risk
Stock optimism collides with US interest rate fears
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On August 18, 2025, global markets are gripped by a state of anticipation as fears of hidden stagflation in the US economy mount, increasing pressure on stocks, commodities, and currencies. Despite the rise in some Asian indices, investors are now assessing the possibility of a US interest rate cut against the backdrop of still-high inflation data. According to a Reuters report, nearly 70% of investors expect the US economy to enter stagflation within the next 12 months, amid declining manufacturing indicators and continued pressure on commodity prices. |
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Gold and Oil: Havens or Victims?
Gold witnessed relative stability with an upward bias supported by lower US bond yields, maintaining its safe-haven status amid a weak dollar. In contrast, oil declined slightly due to de-escalation talks in some geopolitical tensions, reducing concerns about supply shortages.
US Stocks: Between Optimism and Conservatism
The Nasdaq and Dow Jones indices fluctuated at the beginning of today's session, driven by uncertainty about the US Federal Reserve's stance on interest rates, especially after officials indicated that a rate hike could return if inflation does not slow sufficiently.
Currencies: Dollar on the Defensive
The US dollar continued to decline against the euro and the British pound, as markets awaited the minutes of the Federal Reserve's upcoming meeting this week. Riskier currencies such as the Australian and New Zealand dollars saw some slight gains, supported by improved risk sentiment in Asia.