Blogs, News and Thought Pieces

Are We Nearly There Yet? - Not the first time we’ve used this title but appropriate during school holidays and reviewing market optimism, or lack thereof, about official rate cut expectations in the UK, EU and US.

Two things grabbed market attention in the first half of March: The UK budget on 6 March which had little impact on financial markets and the US employment report which commands more attention than it warrants given huge revisions to previous data.

The final day of February brought the latest update on US inflation or, to be more precise, the US Federal Reserve’s core personal consumer expenditures (PCE) prices index, which was released for the month of January.

Following a reorganisation at our ACD,  from 11th March, contact details for advisers and clients have changed. Full details contained in this post.

One of the problems for central banks on the path to lower interest rates is the tightness of the labour market and the effect on wages. 

Inflation in the US improved, in the UK it faltered yet the trajectory remains downward; food inflation was the lowest since April 2022 on a year-on-year basis when data was released in January.

Financial markets began 2024 like markets that have enjoyed themselves too much in the run up to Christmas.  As we indicated previously, over-optimism was in play with regard to futures markets’ official rate reductions forecast for 2024 in the US, UK and Europe.

December was a month when inflation continued to fall in developed countries allowing financial markets to price in significant official rate cuts for 2024. Economic data was supportive and welcomed along with the improved inflation backdrop.

The debate for western developed economies is whether they will encounter a recession in 2024, or perhaps interest rate futures in those markets are already forecasting a weaker outcome. Last week saw the announcement that the UK’s October output fell.

November has been about a bounce in developed markets’ equity indices on the belief that the central banks of the US, Europe and the UK were through with tightening monetary policy and Japan wasn’t moving towards any meaningful change to its overly accommodative stance.

Finding the T. Bailey Funds has become harder since our ACD became part of the Waystone Group of companies. Our funds can be found under the Management Group heading of Waystone Fund Services (UK) Ltd and now have the WS prefix at the beginning of each fund name.

November has been about a decent bounce in developed markets’ equity prices in the first few days, on the belief that the central banks of the US, Europe and the UK were through with tightening monetary policy and Japan wasn’t for any meaningful change to its overly accommodative stance.