Castle securities alert market situation changed, Wash's anti-inflation stance may drag down risk assets.

Castle Securities stated that investors have underestimated the determination of Federal Reserve Chairman Kevin Wash to bring inflation back to the central bank's 2% target, as well as the drag this may bring to risk assets. Nohshad Shah, head of fixed income sales for EMEA at the company, stated in a customer report that the recent drop in oil prices almost does not help weaken the arguments for a Fed rate hike because underlying inflation pressures remain high. He also pointed out that the AI-driven stock market rally is becoming more fragile, as evidenced by decreasing computing power prices, falling AI service expenditures, and an increasing scrutiny of whether returns are sufficient in the face of high spending.