Recession concerns recurrence, unemployment benefits applicants rise, inflation data eclipses

The market disregarded the higher-than-expected CPI data in August (2.9% overall, 3.1% core) and turned to the surge in unemployment benefits applicants. Last week, the number of unemployment benefits applicants reached 263,000, the highest level in nearly four years. The 10-year Treasury yield fell below 4%, reflecting growing concerns about a slowdown. Cryptocurrencies initially fell but then rebounded, with weekly gains of 11% and 17% for altcoins such as Solana and Dogecoin, respectively. Despite rising stagflation risks, traders now expect the Fed to cut interest rates next week, betting on maintaining growth rather than controlling inflation.