Deutsche Bank Warns Record Equities Price in 1 Fed Hike Too Little Risk

2 articles · Updated · Yahoo Finance UK · Aug 22

Record global equities and rates markets pricing just one more Federal Reserve hike show investors are assuming a near-immaculate mix of resilient growth, tame inflation and contained supply shocks, Deutsche Bank said.
1996-level U.S. financial conditions and inflation still above target across major economies could force central banks to tighten more aggressively than markets expect if growth stays firm.
A weaker economy would also threaten elevated risk-asset valuations, with Deutsche Bank arguing a slowdown alone—not necessarily a recession—could trigger declines like the 2015-16 correction or 2022 bear market.
Oil still below recent peaks despite the blocked Strait of Hormuz adds a further risk, because a fresh supply shock could hit both equities and bonds after markets priced in little going wrong.