If we focus on the Fed, perhaps the politics will go away
- The US Federal Reserve stands alone as a beacon of hope to followers of economic rationality, amidst a raging sea politics. We do not expect any change in policy today, but the press conference allows Yellen to set out the framework for future rate increases.
- The economic argument for policy tightening was bolstered by the evidence of stronger spending from the consumer (albeit in data that will be subject to multiple revisions ahead). Today's PPI inflation is less relevant to the debate (more relevant to equity investors).
- Opinion polls in the UK EU referendum have started to show a small but consistent lead for exit. Comparisons are difficult because methodology is changing, and this makes intelligent assessment difficult. Unintelligent assessments will abound.
- The Euro area financial markets have been experiencing flight to quality flows on the back of the UK referendum uncertainty. There is little to distract from that ebb and flow today – the data releases from the Euro area are relatively minor.