If the first quarter of 2025 was a step into the unknown, the second quarter has proven even more so. On/off tariffs remain part of the U.S. president’s arsenal, but now they’ve been joined by Tomahawk missiles. An Israeli strike on Iran was always a possibility, but direct U.S. involvement has brought another dimension. While…
It has been an intriguing first quarter of 2025. As ever, we live in interesting times but if there have been general global themes, they are inflation remaining a little sticky, GDP growth jammed in low gear and rate cuts somewhat conspicuous by their absence. The price of gold also touched all time highs. Its…
Welcome to 2025; we have a relatively new government in the U.K. and a freshly minted administration in the U.S. As for the E.U., it seems likely that political issues will only aggravate obvious economic pressures. This is particularly relevant in Germany, its manufacturing powerhouse, which increasingly looks bereft of both political leadership and economic…
Does the election of Donald Trump change the investing landscape? Some expect it to but we’d be very surprised if Trump’s eclectic mix of tariffs and tax cuts radically changes America’s course. The former is inflationary and risks tit for tat reprisals. The latter might work if federal debt wasn’t $36tn, rising at $3bn per…
November will see rate decisions from both the U.S. Federal Reserve and the Bank of England. In the wake of relatively benign inflation data, interest rate reductions are almost a foregone conclusion. The European Central Bank cut by another 0.25% on 17th October. The background is clearly disinflationary. UK inflation at the CPI level…
It was no particular surprise to see the Federal Reserve cut its benchmark interest rate by half a percentage point to a range of 4.75% – 5.0%. Of the 12 voting members, only one demurred and even they voted for a quarter point reduction. Chair Powell noted “this reflects our growing confidence that with an…
September will see interest rate decisions from the U.S. Federal Reserve, Bank of England and the European Central Bank. It is probably fair to say the majority of commentators are expecting rate cuts and, theoretically, the latter always enhances the value of equities. However, rate cuts at this juncture would imply a question mark over…
It has been a very busy few weeks. The UK has a new government, intent on ‘growing the economy’. President Biden announced he was suspending his 2024 re-election campaign in the wake of mounting pressure from within the Democratic Party after a series of gaffes had seriously damaged his credibility. Perhaps the only real surprise…
The U.S. Federal Reserve kept its key interest rate unchanged and guided that just one reduction might be expected before the end of 2024. It added that it believes the long run interest rate (however one defines such a number) is higher than previously thought. Not that long ago, there was realistic chatter of 5…
We have now entered territory where, if rate cuts are realistic, the data will support it. In both the U.K. and U.S., September reductions are increasingly being thought of as probable rather than possible. That said, having missed inflation targets for years via inaccurate forecasting, central banks carry a burden their battered credibility will struggle…