Some investors who took comfort in last week’s moderating inflation figures are leaning further into bets that prices are cresting, a trade that has stung over the past year.
The July consumer-price index fueled renewed wagers that inflation is more circumstantial than structural and that the Federal Reserve will in response moderate its rapid pace of rate increases. Investors are now projecting a smaller Fed rate increase in September, have continued to price in rate cuts in the first half of next year and have bought up shares of tech companies, which are primed to perform well if rates ease.
