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.

The nations of the West face crisis: how to fund vital infrastructure and critical defence spending without upsetting bond markets? They are worrying about the wrong things. Time to rethink government spending and how to do it.

Christine Lagarde is under attack from within The ECB from staff who say they mistrust her. They clearly don’t understand their jobs or her role. Lagarde is a politician leading a political central bank. She has already achieved many of her goals. Generals don’t need to be popular – they need to be effective.

The US Stock Market hit a record high on Friday. Yet around the globe the disconnect between euphoric markets and unhappy voters has never been so wide. Markets are still distorted on low-rate expectations, while populism and inequality are rising.

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.

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…