Last night Jerome Powell, Chair for the US central bank, announced what most economists had predicted - the Federal Reserve would be holding interest rates at 5.25%. Chris Leyland, Director of Investment Strategy, looks at the details of this announcement and what it means for your money.

The global economy continues to demonstrate strong evidence of ‘disinflation’ – that is, falling price pressures and a trend towards central banks favoured 2% CPI targets. It continues to be the consensus that central banks will communicate the likelihood of lower interest rates over the coming months.

The US Treasury borrowing requirements were lower than projected in October 2023. The prospect of the supply of US government bonds being $100bn lower than expected for Q1 and Q2 2024 coupled with expectations of positive real GDP, falling inflation and the propsect of interest rate cuts paints an effective picture for asset markets. Global bond markets also responded positively on the day to a shift in tone from certain European Central Bankers, more open to the idea of interest rate cuts in Summer of this year. 

Investment Director Paul Durrans will take us through what will be an important week for investors. The Bank of England and the Federal Reserve will be meeting to decide if a change to interest rates is necessary. Key inputs such as labour market data, wage growth and economic activity will be released this week.

This week George Bell and Matthew Henderson reflect on developments in the US, focusing on the region’s recent strong economic growth. They look at how this, alongside positive movements in global equity markets, has affected your investments.

Our Portfolio Manager, Matt Henderson dissects the purchasing manager's index data out of Europe, the US and the UK - which looks at manufacturing and services within the regions. 

Chris Leyland, Director of Investment Strategy, looks at the overnight announcement from the China who pledged to cut banks' reserve requirements by 0.5% in an effort to stimulate their economy. This will release one Trillion Yuan in long term capital. How are markets reacting to this?

This morning our Investment Director Paul Durrans discusses the latest interest rate decision in Japan as well as the policy changes in China to help support their domestic equity markets. In addition, news this morning that the UK government borrowed less in December which may increase the likelihood of tax cuts heading into the  general election.

As we come to the end of a shortened week due to MLK day in the USA, our Investment Directors Kevin Kidney and Paul Durrans review an eventful week in the UK markets and provide some clarity on the issues with the Chinese economy.

Today, Kevin Kidney, Investment Director, takes a look at economic data and how this is impacting current market trends. With data suggesting positive economic growth, why have markets trended downwards?