Global Rates: DM inflation markets under higher real rates

The Fed's hawkish September hike reflects resilient growth, not inflation fear, while real yields hit multi-year highs across US, euro, and UK markets.

• Fed hikes hawkishly: The Fed delivered a September hike and is priced for ~4 more by end-2027, driven by upside growth risk (flash PMIs at 5-year highs, ~5% growth) rather than inflation, per Harry Downie.
• US inflation trend softer than headline: August core CPI beat at 29bp (vs ~20bp consensus), but ~10bp came from a telecom-services methodology change; headline CPI has undershot for 14 of last 18 prints.

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