The Fed cuts rates, and you need to know as much about semantics as economics......

ref :- All the post-Fed round-ups "Semantics : the branch of linguistics concerned with the meaning of words" , The OED Just a quickie today, and to absolutely no one's surprise the US Federal Reserve cut rates by 25 basis points to a band of 1.50 - 1.75% yesterday. It was also fairly widely (though certainly not universally) expected that they would signal that they would now take a breather from further rate cuts for the time being just to take stock. Again , they conformed to the majority expectation .... but of course central bankers don't like to speak in absolutes unless they absolutely have to and market-watchers have to glean their intentions from the language used in Fed statements

Everyone to sing from the same hymn sheet? Seems unlikely, Mme Lagarde…

ref: - "ECB chief Draghi uses swansong to call for unity”, International Section, The Financial Times ref: - "Negative rates and the Swedish experience”, Letters, The Financial Times First up, just a quick reminder that the US Federal Reserve's Open Market Committee begin their two-day meeting today and will announce their monetary policy decision tomorrow. If there doesn't seem to have been too much hullabaloo ahead of this event, it's probably because their decision is pretty much a foregone conclusion and has been for some time. There may be a few dissenters on the board, but as much as anything the threat of global headwinds to the US economy will prompt the Fed to take more pre-emptive

That was then, this is now…

ref: - "The world economy's strange new rules”, The Economist, Leader and Special Report We are just going to point you towards the Economist, which this week puts an examination of how the economic rules have changed front and centre… figuratively and also literally in the case of the hard-copy magazine. It's not exactly revelatory… Uncle Tom Cobley and all have been talking about this for years now, but such attention from the Economist almost makes it all seem "official" and besides, it's useful to see things laid out in black and white. Even now, the evidence that some things are changing (or have changed) so fundamentally still comes as a bit of a shock. You'll need to find a few moment

" I WANT it ..... I NEED it ..... (but I know it doesn't work) "

ref :- "Bond investors are addicted to the stimulus placebo" , Markets Insight by Tommy Stubbington, The Financial Times, Markets & Investing It hasn't always seemed that way (see "Greenspan Put" etc) , but theoretically at least central bank mandates have absolutely nothing to do with supporting asset prices. The dual mandate of the US Federal Reserve targets sustainably high levels of employment and control of inflation. The mandate of the European Central Bank (ECB) is even simpler ..... nothing specific about employment (though everything's connected, of course), and one simple obligation to control price inflation in the Eurozone for which the current target is an annual rate of just u

It's not just Sterling in the crosshairs .... or at least it shouldn't be

ref :- TAIL RISK by Katie Martin, The Financial Times, Companies and Markets The monumental dog's breakfast that is Brexit is finally approaching its dénouement .... or at least it might be. If there's no deal agreed, which on the face of it is a scenario that seems more likely than not, the UK parliament will block an exit under those circumstances even as the Prime Minister maintains his commitment to be gone from Europe by the end of the month "come what may". How that might ultimately pan out is anybody's guess. Oh God, will this never end ? Things being what they are, it's hardly surprising that Sterling is so volatile .... under the cosh when a "No Deal Brexit" appears more likely, ral

Danger ! ! Whipsaw alert : Bonds and Gold .....

ref :- Various Had we had the chance yesterday, we would have penned something about a couple of sharpish counter-trend moves in long-term bull markets that might have been a bit painful for some. As it happens, both bonds and gold were to bounce by the end of the day and thus offer us the opportunity to warn of the dangers of getting "whipsawed" .... which of course is much easier to do with the benefit of hindsight. Of all the definitions of being whipsawed, NASDAQ's glossary of terms gives us probably the simplest but also the pithiest. Being NASDAQ, they refer to stocks but we can widen it to any market we like . Being whipsawed is "buying just before prices fall and selling just before

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