Rate cuts

Posted by: Paul Donovan

30 Oct 2019
  • The US Federal Reserve interest rate decision is due. Markets expect a 0.25% cut. The Fed has not attempted to persuade markets of any other outcome. A rate cut is unlikely to boost investment – trade tax uncertainty hurts that too much. Unlike past Fed chairs, Powell is not an economist. Markets should remember that in considering the weight of Powell's remarks.
  • The UK House of Commons has agreed to have a general election. Her Majesty has yet to get rid of Parliament, though doubtless will embrace that task with enthusiasm shortly. Opinion polls show similar readings to those before the 2017 election. A similarly inconclusive result is possible.
  • A report indicated that the European Union leads the world in technology regulation, with the US a distant second. This matters for global trade. As US has abdicated global leadership, the EU has stepped in. The UK's proposed departure from the EU will change the accent of EU regulation, and thus global regulation of trade.
  • US GDP data is due. It will be wrong (it is always revised significantly). German and Spanish inflation are of limited interest. French consumer spending is due, and Japanese retail sales had a pre-sales tax boost.

Explore more CIO Daily Updates