Central banks are not supposed to thrill
- US President Trump is not thrilled by the Fed. This is as it should be. No one should be thrilled by central banks. Central banking, indeed economics generally, is supposed to be exciting, passionate, and the very life blood of modern human civilisation. It is not supposed to be thrilling.
- Markets have not particularly liked US President Trump's comments, seeing them as a threat to the independence of the central bank. The Fed's independence has little legal standing. It is independent by custom more than by statute. There is a shocking lack of economists amongst the voting members of the FOMC at the moment, and a high number of vacancies.
- US President Trump also suggested that the forthcoming trade talks with China would not accomplish much. These remarks were made in an interview, and so do not carry the majesty and weight of a proclamation on the Trump Twitter feed, but nonetheless are attracting attention.
- There is not much on the data agenda today. Japanese store sales numbers came out, falling, and UK public finance data is due. There is a sense that markets are waiting for the Fed's summer camp for economists at Jackson Hole later this week.