Worldwide Financial Planning

This is the first time the Fed has cut rates this year but the cut was widely expected so reaction was muted. More significant is the dovish outlook from the Fed’s voting members, as most now see two further cuts this year. This caused some weakness in the US dollar and helped lift US equities.

Once you realise credit is created out of thin air, the key question becomes: where is that credit going? Is it financing new businesses, sustainable energy, better infrastructure? Or is it pouring into property speculation, driving up house prices and rents while doing little for productive capacity?

Investors also appeared unmoved by rising geopolitical tensions. The shooting down of Russian drones over Poland and Israel’s attack on Hamas’ political leadership in Qatar passed with little market reaction and the price of oil fell slightly after OPEC countries agreed another production hike.

Inflation. Excited to read about it or have a chat at the bar or dinner table? Either way, it’s the guest at every dinner table, nibbling away at your wallet before you've even passed the gravy.

Long-dated bond yields have moved higher for most developed countries. The move was mostly reversed by the weekend. However, long-dated gilt yields have moved steadily higher this year, and this will be of concern to the government as it attempts to balance its spending commitments with its pledge not to increase income tax, NI and VAT.

Do you ever wonder why central banks target a two per cent inflation rate? You might think it came from a Nobel-winning economic model, or some robust international consensus. Nope.