Traders will be closely watching the U.S. consumer price index reading later for July on Thursday for indications on the Fed's future rate trajectory.
Veteran economist Jim O'Neill says central banks will need to keep interest rates up around 5% across major economies for longer than the market expects, even as inflation subsides.
Core inflation, which excludes volatile food and energy, has remained sticky and is expected to come in at 4.8% year-on-year in July.
"I don't quite get this view that rates have to automatically start coming back down again in order to have a permanently more balanced world, in my view, economically.
O'Neill also suggested the U.S. is "in a decent position to avoid a recession," noting that inflation expectations have remained fairly stable.
Persons:
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