While a pre-earnings surge for Nvidia (NVDA:NASDAQ) shares may have helped US stocks snap their recent losing streak, there’s no doubt concerns about interest rates staying higher for longer have helped temper market sentiment.

US 10-year treasury yields hit a 16-year high of 4.35% amid continuing signs of US economic strength, and minutes from the latest Federal Reserve meeting reinforced the market’s fears with the Fed still citing inflation upside risks which might necessitate further rate hikes.

Investors will have to wait until 20 September for the Fed’s next decision but a clue to the thinking of the world’s most important central bank should come at the Jackson Hole Economic Symposium which kicks off today (24 August).

Held in Wyoming, this annual summit of central bankers is closely monitored by traders and investors for clues on the future direction of monetary policy. European Central Bank chief Christine Lagarde and officials from the Bank of England will be present but the man most in the spotlight will be Fed chair Jerome Powell who is due to address the conference on 25 August.

In the meantime, Bank of America says most investment portfolios still hold too many assets which are priced for a ‘2% world’. The investment bank argues we are moving to an ‘age of scarcity’ marked by rising debt burdens, ageing populations and a move away from globalisation which will push inflation, growth and interest rates back to 5% norms or in other words a ‘5% world’.

The UK is some way behind the US in its own battle against inflation and figures for July weren’t too encouraging as, despite easing, inflation came in a smidge higher than anticipated at 6.8% (16 August). Core inflation remains unhelpfully sticky at an unchanged level of 6.9% and, combined with the record level of UK wage growth reported on 15 August, puts the Bank of England under pressure to deliver at least a 25 basis point (0.25%) increase at its next meeting on 21 September.

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