Follow Paul Donovan

Put your hands up

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Decision day in the US, where the FOMC of the Federal Reserve votes on interest rates. Investors have been told to expect a quarter-point increase, and so investors do expect a quarter-point increase – it is the press conference that has the potential to move markets.
  • US consumer price inflation is due, and the headline measure is expected to rise further as the distortion of the weak oil price falls out of the calculation. Since the start of 2015, consumer price inflation has risen more than twice as much as the fed funds interest rate.
  • Not decision day in the Netherlands, just election day (the decision on the Dutch government is made out of public view in the coming weeks and months). Investors may look to the results to see if the reputation of opinion pollsters can be resurrected.
  • It would be wrong to extrapolate the performance of anti-EU politicians in the Netherlands into the prospects of anti-EU politicians in the forthcoming French election, but soundbite economics is all about drawing a straight line between two unconnected points. Today's votes will be counted by hand, to minimize interference.