Expectations of early interest rate cuts are high, especially as recession signals are set to rise through Q1 2024. Will Central Banks stay the course and normalise interest rates, or will be take the easy option of further low interest rate distortion?
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?
The Tough Times will pass - how do you then create an economy that balances Growth and Prosperity, Politics and Justice, the Environment and Business, Wealth and Equality. Could it be as simple as setting the right interest rate?
Nvidia confirms the AI everything bubble! FOMO means everyone will play catch up! There is a growing divergence likely as inflation, growth and interest rates spells deep trouble for Europe and the ECB, while the USA recovers and the UK muddles through.
Don’t assume inflation is licked, don’t assume interest rates will stop rising, don’t assume there aren’t further bank failures to come, don’t assume politics and society will cope well, but don’t assume it’s all end of the world. In periods of financial uncertainty there is opportunity…
esterday’s US CPI numbers look good at a glance, but the reality is the Western economies may face ongoing sticky inflation and long-term stagflation while reversing the economic damage of a decade plus of monetary experimentation. That requires new investment approaches.
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!
Inflation across the West looks to be more entrenched than markets believed – Higher for Longer. Maybe it’s time to accept it’s going to take time to fix, and look elsewhere for returns.
It’s a big week for inflation data, but markets have caught a dose of common sense as the reality of higher for longer interest rates settles in. The question of why the market believes overly frothy narratives is fascinating – understanding why is critical to bet against them.
Gold – can’t eat it, can’t use it, but its everything crypto never was: tangible, exchangeable, a store of value, and a kitty for when things get tough. In uncertain markets…. Don’t forget the yellow stuff.
