Thursday 5th May 2022
The FOMC announced a 50 basis point rate rise for the US. As NAB’s Skye Masters notes in today’s podcast, the market response was fairly muted, until Jerome Powell gave his press conference shortly afterwards. One comment, that they were not contemplating a 75-basis point rise, sent bond yields diving lower and equities shooting higher. Skye says markets had priced well ahead for a hawkish Fed, now they are taking some of that pricing back. But uncertainty hasn’t fallen away, with or inflation signs in New Zealand’s employment data, in Australian retail numbers and with another day of rising oil prices. We can expect a less hawkish Bank of England later, but it’s still likely they will raise rates even with the cost-of-living crisis being faced in the UK.
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Treading water, but inflation expectations are on the rise again
Inflation concerns are on the rise again says NAB’s Rodrigo Catril, as US Treasury yields step up again. Meanwhile, stellar earning results, like Alphabet, Microsoft and Tesla this week, don’t always result in higher share prices – has the market reached a peak for now?
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May helps pound up whilst US chows down
Theresa May has reached agreement with Europe on the shape of the final deal, helping the pound up, whilst the US chows down for Thanksgiving.
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Is Economics a Science? Really?
Steve Keen says economics can be a science, if economists behaved like scientists – that means recognising anomalies and adjusting their theories accordingly.
