What really matters in volatile times

Daily update

The volatility of some financial markets produces stirring financial media headlines. However, most major equity markets (other than the US) are up on the year. Precious metal volatility (up and down) has been too abrupt to generate major wealth effects. Crypto is not an asset, and is held by a tiny portion of society. It is unlikely that consumer behavior will change because of recent market moves.
US employment is important to consumer behavior; this week’s US government shutdown means we do not get the US employment report until next week. Overall, consumer behavior revealed credit card use, etc., and does not suggest strong concerns about the labor market, but a reluctance to hire is still being hinted at.
The closely divided Bank of England decision increased markets’ conviction of future interest rate cuts. Inflation is expected to trend lower with more accurate data and distortions fading from the figures. Bank of England Chief Economist Pill speaks today.
German trade data should come in firm—global trade, excluding the US, is doing just fine. US Michigan consumer sentiment is mainly useful in demonstrating the extraordinary distortions of political polarization. US consumer credit data is a limited focus—consumers are paying for tariffs by cutting savings rather than borrowing.