Persistent inflationary pressures keep expectations for consecutive Federal Reserve rate hikes rising; AI investment risks intensify financial stability concerns.

Zhitong Finance APP has learned that as U.S. inflation reaccelerates, Federal Reserve officials released hawkish signals this week, further strengthening market expectations for a December rate hike and opening the door to another increase in January next year. San Francisco Fed President Daly said on Friday that the Fed will likely need to raise rates further, especially against the backdrop of worrying trends in services inflation and companies finding it increasingly difficult to absorb rising costs by compressing profit margins. Meanwhile, the Fed's latest semi-annual financial stability report warned that the artificial intelligence (AI) investment boom has pushed stock valuations to remain elevated, and that related investment returns and financing risks could pose a threat to financial stability.