Wall Street Underestimates Persistent Inflation Risks Despite Perceived "Trumpflation" Peak

Despite Wall Street's belief that "Trumpflation" has peaked, influenced by factors such as a potential peace deal weighing on oil prices, underlying economic indicators suggest persistent inflation risks. The latest FOMC dot plot and Core PCE data indicate that Federal Reserve policymakers may need to consider further rate hikes, challenging the market's current sanguine outlook. This scenario could lead to increased volatility, particularly for a stock market heavily reliant on the partially debt-financed artificial intelligence build-out to drive growth projections.