The Bank of England held its base rate at 4%, citing inflation still running well above target. Additionally, it is slowing down its quantitative tightening (QT; bond sales) from £100B/year to around £70B. Inflation in the UK remains sticky (3.8% in August), which supports the BoE’s cautious stance. We should not be surprised to see […]
Bank of England holds base rate at 4% Read More »
Bonds, FTSE 100, Inflation, S&P 500U.S. inflation and employment market signals suggest the Fed is very likely to cut interest rates at its meeting next week. The U.S. Consumer Price Index (CPI) data for August came in at 2.9% year-over-year, with core inflation (excluding volatile food & energy) steady at 3.1% y/y. These readings are higher than the Fed’s 2%
U.S. CPI as expected Read More »
InflationThe weak job report from yesterday, which showed only 22,000 jobs added in August and an unemployment rate rising to 4.3%, has pushed consensus among analysts and financial markets that the Federal Reserve should and likely will cut interest rates at its next meeting later this month. Financial markets are now pricing a near-certainty (97–100%
Futures show indecisiveness, hovering around the flatline as investors await key labour market data, which could solidify expectations for a Federal Reserve rate cut at its September meeting. Alphabet soared 9.1% on favourable antitrust developments, and Apple jumped 3.8% providing upward momentum to the Nasdaq and broader indices. But bond yields remain elevated and could
Goldman Sachs warning Read More »
Bonds, InflationBond yields across developed economies are rising mainly due to a combination of higher government deficits, increased debt issuance, quantitative tightening by central banks, and a reduced appetite among traditional buyers for long-dated bonds. Main Drivers of Rising Yields: Fiscal Deficits and Debt Issuance: Many governments are running large fiscal deficits and are borrowing heavily,
Why yields are rising Read More »
Bonds, InflationWe can see two clear Elliott wave cycles on US CPI since the 1930s. Now we are probably in the third cycle. Elliott wave analysis suggests higher inflation ahead. US CPI data chart going back to the 1930s shows several Elliott wave cycles. The first one occurred in the 1930s and 1940s, during that period
Why Inflation May Remain High Read More »
Inflation