Trump described Fed Head Jay Powell as "stupid" for not easing rates – Powell is playing safe, waiting for the Trump impulse to play through the economy. The standoff in Iran looks likely to prove Trump’s pivotal moment: is he a risk taker, or just noise? The stakes are massive - the upside is consolidation of US power, the downside includes acute embarrassment and MAGA disillusionment in the Presidency.

Despite the robust US economy, the market’s prime concern remains when and how quickly the Fed will ease interest rates. What if they don’t? We’re heading into a new normalised post GFC interest rate environment, and long-term higher rates will be a good thing!

It’s a big week for Central Banks: the BOJ on Tuesday, The Fed on Wednesday and the BoE on Thursday… but none of them are set to ease rates (the BoJ might even hike). It’s a very different market to what traders expected earlier this year. This is becoming the Year of Normalisation.

Markets expect a swift series of interest rates cuts will drive prices higher. They are fooling themselves. Inflation remains sticky. Central banks have a debt crisis to address while weaning the economy off the distortions of low-rate addiction. The scope for cuts is limited. Time to focus on what “higher for longer” real-rates and mean for market fundamentals.

Markets thrive on competing perspectives, but trends after the strongest narrative. Rather than pray for early rate cuts to boost prices, maybe we should figure out what would be best for the economy?

Japan says it is not tightening? Nope. It “eased” yield curve control which is normalisation by any other name. It will have profound global investment flow consequences. Time to buy a new copy of the Japan Company Handbook and put your buying boots on.

Stocks are looking forward to a double dose of joy from strong tech earnings and the Fed close to end of the tightening phase, but these may be Potemkin Markets.. foundations in the sand and little behind the façade… says the grumpy bond trader…

The Media love financial crisis – it sells. The reality is the need to understand, plan, prepare, and don’t expect anything you expected to happen, happen. Enjoy. Sun comes up tomorrow.

Central Banks face a mighty challenge persuading markets and depositors the banking system is stable. The war between chaos and order in markets has turned hot. At stake is the stability and future of the global economy. Anyone for the last few choc ice?

SVB is a crisis averted, but the market wasn’t paying close attention which spells opportunity. There are bigger risks from central banks being distracted from fighting inflation and normalising rates. That’s the real crisis!