The month of September 2026 was marked by the return of major central banks to monetary tightening: within the span of a week, the ECB, the Fed, and the BoJ all raised their key interest rates by 25 bps, which is a first for these three central banks in the same month. This move occurred in a context of high energy prices. Indeed, the conflict between Iran and the United States intensified again at the beginning of the month, with attacks on both sides against ships near the Strait of Hormuz. The Brent barrel thus crossed the $100 mark again on September 9, for the first time since July, before slightly retreating to end the month up 16% at $104. It should be noted that both sides seem to have initiated discussions regarding a possible agreement.
The inflation indices published in September, covering the month of August, confirmed the divergence between the two sides of the Atlantic. In the eurozone, headline inflation accelerated sharply to 3.2% from 2.9% in July, its highest level since September 2023, driven by a renewed surge in the energy component (+14.3% year-on-year). Core inflation, however, slowed slightly to 2.4%. In the United States, headline inflation (CPI) remained stable at 3.4% year-on-year, while core inflation fell to 2.4%, its lowest level since March 2021. Finally, August’s “core PCE” inflation came in at 3%, well below expectations, partly thanks to methodological revisions.
Activity indicators once again demonstrated the resilience of developed economies in the face of high energy prices. In the United States, the August employment report was a significant upside surprise, with 162,000 non-farm jobs created versus 53,000 expected and upward revisions for previous months, while the unemployment rate remained stable at 4.1%. GDP growth in Q2 was also strongly revised upward, to 2.2% quarter-on-quarter annualized from 1.5% previously. Similarly, the strength of the September PMI surveys (58.4 for the United States) made an impression and was interpreted as a sign that US growth was stronger than expected. In the eurozone, the composite PMI rose for the fourth consecutive month, to 53.1 in September, its highest level since April 2023, notably with France returning to expansion territory for the first time in ten months. Meanwhile, China continues to stand out, as retail sales grew by only 0.4% year-on-year in August and investment continued to contract (-7.2% over the first eight months of the year), while industrial production remains resilient at 5.2%—but mainly driven by the technology sector and exports.
The ECB raised its key interest rates by 25 bps on September 10, increasing for the second time in three months, with the deposit rate brought to 2.50%. The Governing Council justified its decision by stating that inflation is expected to remain sustainably above the 2% target. On September 16, the Fed unanimously raised the fed funds target range by 25 bps, to 3.75/4%, marking its first rate hike since 2023. Kevin Warsh presented this decision as the “removal of a dose of accommodation” rather than a tightening, while once again emphasizing that he did not intend to provide guidance on future actions. The “dots,” i.e., the FOMC members’ projections for key interest rates, indicate another rate hike by the end of the year. Finally, the BoJ raised its main policy rate by 25 bps, to 1.25%, its highest level since 1995.
As a result, bond yields rose sharply over the month, driven by the combined effect of higher oil prices and monetary tightening. The US 10-year yield gained about 50 bps over the month, ending around 5.28%, its highest level since 2007, while the 30-year yield exceeded 5.60%, a high since 2002. The German 10-year yield rose by about 25 bps, to 3.55%, after reaching its highest level since 2009. In Japan, the 10-year yield crossed the 3% mark for the first time since 1996, ending the month at 3.02%. Finally, gold was penalized by the rise in real rates and lost about 6% over the month, erasing much of its August gains.
Equity markets paused in September, penalized by the rise in long-term rates. The S&P 500 ended the month roughly unchanged (about -0.8%), while the financial sector significantly underperformed (-7.3% for the month, its worst monthly performance since March 2023). The Eurostoxx 600 fell by 2.5%, marking its first monthly decline in six months. The Nikkei rose by 0.7% over the month, but recorded its first quarterly decline since early 2025. Finally, the MSCI Emerging edged down slightly (-0.8%), notably penalized by the Korean and Chinese markets.
Positioning remains broadly neutral on equities in view of the fund’s allocation framework. Risk construction favors relative choices within equity markets, with a preference for large US capitalizations over small caps. Rate sensitivity, already underexposed, and the credit pocket have been maintained.
The resilience of activity and technological investments continue to support earnings prospects, but the cost of capital and energy prices call for a selective approach to equities. On bonds, higher yields strengthen carry, while inflation and public financing needs limit visibility on long maturities. Credit and emerging debt require careful selection of issuers and refinancing risks. Gold prospects remain notably sensitive to real rates, energy to supply tensions, and currencies to monetary policy differentials.