Blain’s Morning Porridge – July 29th 2019
“I’ve seen things you people wouldn’t believe. Attack ships on fire off the shoulder of Orion. I watched C-beams glitter in the dark near the Tannhäuser Gate. All those moments will be lost in time, like tears in rain. Time to die.”
The UK is a curious place. Boris Johnson’s feel-good drive and the numerous plots being arrayed against him, received rather less attention over the weekend than the Minister for the 18th Century’s rather ponderous style guide. Jacob Rees-Mogg, Esquire, has banned a host of words, outlawed clichés, demands double spaces after full-stops, insisted on imperial measures (Kilometers, Kilos and grams are banned), and has made the incorrect use of apostrophes a capital offence. Readers will know my grasp of punctuation, spelling and grammar is nebulous at best – so if I disappear suddenly you can assume the Extreme Grammar-Nazi wing of the Conservative Party has got me!
Back in the real world, this week is largely about tomorrow. Worry not about what’s going on in Hong Kong, the Gulf, or even how bad European economic data might be. The only real question is what will the US Federal Reserve do? It’s not a question of will they ease rates, but by how much- 20% change they may go for 50 bp!
Perhaps the question should be – why ease rates at all?
It may be the depths of a thin summer, but a 25 bp cut will be enough to please the market. The economy won’t change because of a quarter point reduction in ridiculously low rates, but stocks will rally and the market will be properly ecstatic! Donald Trump will tweet to his followers about what a great job he’s doing and how its confirmed by the strength of the stock market. That is a sh*t reason for cutting rates. It worries me the Fed is prepared to pander to Trump and the stock market.
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