Blain’s Morning Porridge – 18th June 2019
“Here’s to all the filthy money and where it went..”
Happy Birthday David!
Apologies for the lack of commentary y’day.. long, dull boring story involving the Isle of Wight Festival, transport hassles and a whiff of pot on a strike slowed train…
So much to think and worry about the morning – the market showing its love and appreciation for BoJo and the heightened chances of a no-deal Brexit by spanking sterling to a 6 month low, or Boeing deciding to rename its troubled B-737 MAX by dropping MAX as Airbus orders come flooding in at the Paris Airshow, but the main story is the Fed.. or should that be how much faith the market is putting in the Fed and the FOMC meeting today/tomorrow? I’m not persuaded…
The market consensus is the Fed will eventually ease US rates, but not this time. It’s how it communicates/hints at timing tomorrow that will be most closely analysed aspect. Expect pages of dot-plot analysis and explanations of whatever he said and meant. Fed-Head Jerome Powell has already made clear the Fed is willing to act to offset slower growth and counter a trade war; “we will act as appropriate to sustain the expansion”.
This is where it starts to look messy. Is it the Fed’s job to “sustain expansion”?
It’s clearly a laudable objective, but let’s not confuse the stock market for the economy! It plays right into Trump’s agenda, his simplistic message to the electorate that stock strength proves his deal making success. An ease would provide a potent hit of short-term ecstasy to an addicted stock market, and give Trump something to crow about – a factor the Liberal press is all over like the proverbial cheap suit.
…click on the above link to read the rest of the article…
