Dateline: September 23rd 2019
The Boys are Back in Town
Last week’s batch of data from the US and Eurozone economies did little to clear the fog around near-term direction. Business confidence remains especially low.
One thing is clear though – Central Banks are centre stage – again.
Members of the US Federal Reserve said they would take whatever action was appropriate to sustain the economic expansion. This probably means interest rate cuts during the year with some members, such as James Bullard, wanting cuts immediately.
Mario Draghi, ECB president was equally “dovish” promising rate cuts, more bond buying and strong pledges on how long rates would remain low, if economic conditions fail to improve. All eyes on Central banks then!
In further evidence of their critical role, President Trump has managed to complain about both central banks in the past week!
Of course a successful life-enhancing Brexit or an outbreak of sweetness and light in Sino-US relations at the G20 could change the picture.
(Still something worrying at the back of the mind, when policy makers say they are concerned about growth and stock markets go up!)
Tradewinds 