Cooler-than-expected August inflation data and strong consumer spending lifted markets Wednesday before a frantic final hour of trading erased gains, underlining US economic resilience amid enduring concerns over elevated fuel prices.
“Spending remained strong in August, but income growth is not keeping up,” Navy Federal Credit Union’s chief economist told Bloomberg, raising fears that economic activity could stall if inflation readings continue to come in above the Federal Reserve’s 2.0% target.
The 10-year Treasury yield also hit a new multi-decade high, dampening the White House’s hopes that the US could grow its way out of crushing debt, with Washington’s interest payments on its debt for the fiscal year eclipsing US military spending for the year.
