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Fed members wrestle

| Posted by: Paul Donovan | Tags: Paul Donovan

  • There are no fewer than five members of the US Federal Reserve wrestling for control of the media spotlight today. The steady pace of monetary policy tightening is likely to be reiterated. Of more interest to financial markets are comments about the structure of quantitative policy tightening.
  • The US data flow is pretty second tier. The NFIB small business confidence data covers the most important part of the US economy – small businesses are about 70% of US private employment, and listed companies are little more than an economic sideshow. However, the reliability of survey data is questionable.
  • The UK BRC like-for-like retail sales were stronger than expected. A surge was always likely because of the timing of Easter, but the UK consumer showed a greater willingness to spend than the timing of the holiday alone would account for.
  • German trade data was also stronger than expected. This matters because trade appears on the Trump Twitter feed from time to time, and Germany has been singled out for special treatment in the past. Economically, Germany should be considered in the context of the wider Euro empire. Politically, Germany is considered in isolation.