The economy is running hot, and that is bad news for stocks and borrowers because the Fed now looks likely to hike rates several more times.

• Private hiring has turned sharply higher after months of falling, ending the case for rate cuts.
• New business surveys show the fastest growth in over five years, with jobs added at the quickest pace in four years.
• Supply bottlenecks mean companies can keep raising prices, pushing input costs to their highest since late 2022.
• Betting markets now price a strong chance of four more hikes by next September, with five close to a coin toss.
• Stocks fell and government bond yields broke above 5% precisely because the economy is booming.

Outlook: With no Iran deal yet and the data still hot, expect more pressure on stocks and higher borrowing costs into the October meeting.