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Market Mood

In developed economies, the persistence of high inflation is preventing anticipated declines in interest rates. Despite not spiking dramatically, inflation has remained uncomfortably elevated, with expectations for March indicating little change in core inflation and the possibility of higher oil prices boosting headline inflation. A potential decline in inflation could stimulate the markets, particularly impacting the 10-year Treasury yield, which has stabilized above 4.4%. Inflation dynamics have also become central to the political debate, particularly with the upcoming US presidential election. Food prices, in particular, have garnered attention, with food inflation under Biden's administration reaching its highest level since Nixon's presidency. This significant food price inflation has caused genuine hardship for individuals, making it a valid point of contention for political adversaries.

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