Economists warn markets are 'too optimistic' about Fed pivot prospects

Although Wall Street and European markets had dipped slightly by Wednesday (5 October), Tuesday's moves took the S&P's advance over two days to 5.7% — its strongest rally since April 2020, according to data by Morningstar Direct.  The rally followed the release of cooler US labour market data, which helped ease some concerns about the pace of the Federal Reserve's interest rate rises. Talk of a possible pivot from the Fed also intensified after Australia's central bank delivered a smaller-than-expected 25bp interest rate hike.  On Monday (3 October), Morgan Stanley's CIO Mike Wilson s...