Congressional Juggling:
The people of the United States have spoken! With both Trump’s Republican party and the Democrats claiming victory over the mid-term elections in the public eye, markets have been more decisive in the face of the ballot. The Republicans held control of the Senate, however, ceded power of the House of Representatives to the Democrats. Markets have interpreted the mid-term elections by undermining the value of the US Dollar, likely pricing in the increased degree of political gridlock that the United States will face in pursuing economic growth. For months, economists and strategists alike have been debating when will economic growth in the United States peak. Given Trump’s pro-market and pro-growth presidency, political headwinds prevent fiscally driven economic growth, increasing the impetus for Powell’s Federal Reserve to pause its interest rate hiking phase. Positively, with the House being controlled by the Democrats, Trump’s capacity to increase the United States’ extant burden of debt does limit the extent to which the White House could drift into fiscal profligacy. Italy’s spending plan remains in the foreground of the picture of Eurozone risk with signs of inflationary pressure in the Eurozone being overwhelmed by political instability. The Pound received a sustained yet light bid at market open as investors continue to orientate themselves towards a long-awaited Brexit deal.
Discussion and Analysis by Charles Porter
Will they, won’t they It’s one week to the day until the next Bank of England decision. It will prove critical to the value of GBP and perhaps prove to be a defining feature of the currency market for at least the first quarter of this calendar year. Bank rate in the UK currently sits […]
Inflation With markets as ever getting ahead of themselves by many having decided that the inflation peak is a yesterday thing, there is a dawning realisation that with the current levels of USA 6.5%, 9.2% UK and 10.4% EU as at Dec 2022, inflation is not only well above target of 2% but is still […]
UK Government Borrowing By Numbers Many people have a disconnect when it comes to linking government finances with their own-bring on the idea of teaching finance as part of the school curriculum-however, yesterday’s release showing the government borrowing figures fall into the category of both attention grabbing but so eye watering that many will likely […]