2024-04-12: Markets

As the two cover images attest, in the span of a little over five months we have come full circle from inebriated optimism to a much somber reality. Official rates are now being estimated to come down with more moderation (some people are beginning to mutter ‘if at all’).

This change of heart was the result of a bad inflation number in the US. More precisely, an unexpectedly realistic inflation number, because there was nothing bad in the number per se; it was just not as good as people wished.

Equity markets generally shrugged the change of heart in the forecast for rate cuts, somewhat surprisingly (to note: global equities in US dollars did have a negative week, as the currency strengthened).

One thing has not changed over the last five month or over the last four years: the solid and disciplined guidance we received from Federal Reserve officials as to what they intended to do in shaping future policy. At each step and time frame, the communication was there for everyone who cared to read and listen. But we know that listening today is a very short commodity; we are all much more prone to express opinions and point the finger at whatever strikes our fancy.

[Image Sources: The Wall Street Journal]