Hawkish Central Banks Worldwide Brace for Sticky Inflation as Trade War Adds Fuel

Global central banks are locking into hawkish stances as inflation refuses to break. The Fed's preferred PCE gauge hit 3.7% headline and 3.3% core in July, the ECB is preparing a September hike to 2.5%, and the BOJ's deputy governor is openly calling for "timely" rate increases. Markets are pricing in more tightening across the board.

Headwinds

Factors working against the rate-cut dreams of yesteryear:

• Sticky US inflation: Core PCE held at 3.3%...