Markets remain on edge, as data on inflation reinforced expectations of a Federal Reserve interest rate hike next week, and possibly in June. The personal consumption expenditures price index excluding food and energy, one of the Fed’s preferred inflation gauges, rose 0.3% in March for a second month. Compared with a year ago, the measure was up 4.6%. The overall PCE price index increased 0.1% from the prior month, restrained by a decline in energy costs, Commerce Department data showed Friday. “What looks like sticky contemporaneous inflation remains an issue, preventing the market from getting too carried away on the rate-cutting phase to come in subsequent quarters,”’ wrote Padhraic Garvey, head of global debt and rates strategy at ING Financial Markets. In Europe, an uptick in consumer-price gains points to more rate increases by the European Central Bank, which also meets next week. Seema Shah, chief global strategist at Principal Asset Management, sees stagflation as “by far” the worst case scenario for risk assets as says there is a “meaningful chance” for further rate hikes from the Federal Reserve beyond May. She speaks with Lisa Abramowicz on “Bloomberg Surveillance.” Analysts at Berenberg said equities’ strong year-to-date gains had been driven by resilient earnings and receding pessimism on economic growth, but “risks are skewed to the downside over the coming months, with headwinds from tighter policy, margin headwinds and US recession.