Worldwide Financial Planning

You only need to look at the wildness of its price to see that no-one knows the answer to that – other than the market makers creating it probably. There can clearly be no efficient pricing structure.

The monthly nonfarm payrolls report, released last Friday, showed a mixed picture, with strong job growth but rising unemployment and a noticeable slowing of wage inflation. This was seen as positive for the chances of a rate cut by the Federal Reserve before summer.

An end to the interest rate hiking cycle would be welcomed by US consumers, who have seen new US mortgage rates spend four weeks above 7% for just the third time this century. Despite this, new home loan applications increased by 2.3% in the week ending August 25.

While the market is easily fooled by headlines so too, unfortunately, are central banks. The true state of the economy won’t be clear for months so policy makers have to make do with the data they have, while the impact of today’s decisions won’t be apparent for another year.

The outlook hasn't really altered but investors are expecting both inflation and interest rates to remain higher for longer.

So start with learning from the past. Why didn’t other resolutions work and why did some actually succeed.