A hop, a skip, a jump, and a cut

It was a busy week for the world’s four most important central banks. By implication, it was also a busy time for the world’s traders, economists, fund managers and market commentators. What have we learned?

A hawkish skip
The big daddy of central banks is of course the US Federal Reserve, or Fed, whose policy interest rate is the base rate from which pretty much all other financial assets across the world are priced directly or indirectly. Its Federal Open Markets Committee (FOMC) kept rates unchanged in line with market expectations. However, it signalled further hikes would likely be needed, unless incoming data shows a softening in inflation and the economic outlook. The pause at last week’s meeting is therefore probably a skip, not a stop.

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