As expected the Federal Reserve raised interest rates by 25bps to 1.25%. Furthermore, a new programme of balance sheet reduction will be underway by clearing a fixed amount of assets each month, though the start date is yet to be confirmed.
An update to the ‘dot plot’ graph shows the median expectation among policymakers of one more rate hike this year, possibly scheduled for September. Furthermore, this will be followed by a continued pattern of hikes in 2018 and 2019.
This is a result of new economic growth projections which indicate that the most powerful economy in the world is on the rebound following Q1 slowdown.
US Dollar strength has inevitably occurred in the morning trading session on the London market with Cable down 1 cent from Wednesday mornings open at 1.2725.
British pound Sterling finds itself in the limelight and trading at its recent highs as somewhat improbably a couple of bolder market commentators have suggested the UK will benefit as a result of the disaffection with the USA and the USD at present. Those commentators have obviously not been following the commentary about UK Chancellor […]
Oil Supply With Friday’s rocketing up in the oil price of 12% to $78, the question is whether that is it and we have just seen a re-set or whether this is the first staging post in a much larger increase. That, of course, depends on the unfolding Israel-Iran attacks and whether that conflict spreads […]
EU Inflation Paving the way for a 25bp rate cut tomorrow, EU inflation came in at 1.9% on the back of uncertainty, lack of consumer confidence and people sitting on their cash. So overall good on inflation but a sign of less good things in the EU. As ever, the overall inflation figure had some […]