Wall St Week Ahead-Stock rally fanned by hopes of Fed 'past peak hawkishness'

Several Wall Street banks have in recent weeks warned that the chances of a U.S. recession are rising, along with an increased likelihood of the low-growth, high-inflation environment known as stagflation.

NEW YORK: Bad news may once again be good news on Wall Street, as signs of slowing U.S. growth fan hopes that the Federal Reserve may not need to tighten policy as much as previously expected.

Home sales have fallen for a third straight month, while big misses from retail giants such as Target Corp TGT.N and Walmart Inc WMT.N shook their share prices last week. The Atlanta Fed's GDPNow estimate of real GDP growth for the second quarter fell to 1.8% on May 25, from 2.4% the previous week.