Eyes on the Federal Reserve

Today sees the first-rate setting meeting of 2019 at the Federal Reserve. The market expectation is that they will leave rates unchanged but what is of much more focus is what is said about interest rate changes going forward. Will the Fed water down further expectations of rate rises given their concern that the US economy is still not sufficiently robust to withstand sharper rises? What is sure is that the Fed will not want to box themselves in to a fixed timetable of rate rises despite the market wanting to understand a well-choreographed programme. Therefore, expect some words around the Fed not able to be specific on this subject until further economic releases clarify the strength of the underlying US economy.

Meanwhile the USD is relatively unchanged and the focus in currency markets has been on GBP and the theatre in Westminster. After a wobble last night GBP has recovered some of its losses this morning and overall has declined approximately 0.5% against the major trading pairs. Brent Crude is back over $60, and the FTSE is slightly firmer at 6900.

For a change while we wait for the Fed and for TM to return to Brussels to do battle on the terms of the UK’s Brexit, today or rather this morning as I write the words of 10CC’s song Wall Street Shuffle do NOT apply!

Do the Wall Street Shuffle

Hear the money rustle

Watch the Greenback tumble

Feel the Sterling crumble

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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