What is normal for the Fed?

As expected, the US Central Bank has raised interest rates to 1.25% and talked about normalising its policy. The statement included detailed guidance on what the Federal Reserve intends to do next. During the financial crash and its aftermath the Fed bought up large quantities of Treasury bonds and mortgage backed securities, forcing interest rates … Continue reading “What is normal for the Fed?”

Trump’s first 100 days: how markets have performed

Is the “Trump bump” over? The surge in the stockmarket, the dollar and bond yields that welcomed Donald Trump’s arrival at the White House has shown signs of flagging as his first 100 days approaches. Donald Trump sailed into the White House on a wave of populist, pro-trade polices. He promised to spend big, create … Continue reading “Trump’s first 100 days: how markets have performed”

Fed policy: it’s conditional

Remarkably few economic decisions depend directly on the interest rate set by the US Federal Reserve (the Fed). Yet with this tool, the central bank is able to exert vast power over the US economy and to steer it towards the Fed’s dual mandate of full employment and 2% inflation. The key to understanding how … Continue reading “Fed policy: it’s conditional”

Why Trump makes the case for emerging markets

Donald Trump’s first weeks as US president are turning out to be just as controversial as his bruising election campaign. A flurry of executive orders on border controls, trade and healthcare has dominated headlines, causing dismay and galvanising opposition. The drama unfolding on a daily basis makes the modest comeback that developing markets have been … Continue reading “Why Trump makes the case for emerging markets”

What happens when rates go up?

A look at the implications of rising interest rates in the US. The US Federal Reserve has begun the painstaking process of raising interest rates, up to 0.5% to 0.75% in December, and has signalled 2017 will contain more of the same. We believe that strong fundamentals support the idea that the US stands to … Continue reading “What happens when rates go up?”

Has the US market risen too far too fast?

Markets do not normally go up in straight line. They usually have pauses for reconsideration and bouts of fear. Investors got over their shock and dismay at the election of Mr Trump very quickly. Share markets soon latched on to the reflationary potential of the Trump tax cuts, proposed increased infrastructure spending and more interventionist … Continue reading “Has the US market risen too far too fast?”

Donald Trump and the prospects for US investment markets

Donald Trump’s victory is an event that could one day be looked back upon as a generational turning point in global politics. In this article, we take a step back from the headlines and examine how his election could affect the trends already underway in the US economy, ultimately to determine how investment markets might … Continue reading “Donald Trump and the prospects for US investment markets”