Daily update
Daily update
- US President Trump vowed to continue investigating the Federal Reserve, and possibly fire Fed Chair Powell. Fed Chair nominee Warsh’s confirmation continues to be blocked by Senator Tillis. Markets do not appear willing to price an end to Fed independence, but given the differences in their reputations within the Fed, Powell might find it easier than Warsh to get rate cuts.
- The Financial Times reports that Gulf states have been borrowing privately. Economically, Gulf economies are experiencing a pandemic-style lockdown. Money is needed now to keep economies moving, and in the future to rebuild and rearm. Borrowing, using post-war oil revenues, and drawing on sovereign wealth funds will fund this. For markets, the question of where this money is spent matters (if not in the US, there are implications for the dollar).
- China’s officially reported first-quarter GDP growth was reported at 5%, in line with the supposed government target. Retail sales data still shows a lackluster performance from domestic consumers.
- UK February monthly GDP data was very strong, but is not really taken seriously. The ECB publishes an account of its last meeting, which pursued a policy of masterful inactivity. Business sentiment data is due in the US—business sentiment pollsters are more to be pitied than taken seriously.