Global equities are soaring to record highs while bond prices tumble, reflecting investor confidence that the Federal Reserve will deliver a rate cut at its September 16–17 meeting. Wall Street closed at fresh peaks and Japan’s Nikkei is edging back toward record levels. Although Stephen Miran will likely miss the meeting after a judge blocked President Trump’s bid to oust Governor Lisa Cook, the soft labor market has markets convinced that policy easing is imminent. Futures now price in 66 basis points of cuts by year-end, with a 7% chance of a half-point move next week.

The main uncertainty is inflation. Producer prices today and consumer prices tomorrow will help clarify whether sticky costs could complicate the Fed’s path and revive stagflation fears. Meanwhile, Europe has its own flashpoints: Poland said it shot down Russian drones that strayed into its airspace, underscoring geopolitical risks, while French President Emmanuel Macron faces renewed political strain after appointing loyalist Sébastien Lecornu as his fifth prime minister in under two years. The ECB’s two-day meeting is expected to keep rates unchanged, with unemployment low and inflation near target erasing calls for another cut.