Federal Reserve more cautious on rate cuts

This week has brought official confirmation of several recent trends. Sentiment is often hard to pin down. It evolves over time, sometimes quite swiftly, and so defining exactly how people feel about a particular issue can be difficult. This week has brought some much needed clarity on two big issues: How closely does the market’s view of inflation match the Federal Reserve’s? And, how bad are Rishi Sunak’s chances of re-election?

Investors have pushed back their assumptions for rate cuts due to rising inflation and robust growth in the US. The Fed held rates as expected and governor Jerome Powell effectively ruled out any further hikes. He warned that rates will remain elevated, while leaving room for a rate cut later this year and the slight drop in government bond yields shows markets broadly agree with the Fed’s view. Meanwhile, any doubts about the Conservatives’ popularity have been laid to rest as results from the local and mayoral elections show recent opinion polls are pretty accurate. Sunak and Powell will both hope that sentiment improves this year, but Sunak appears to have a tougher job convincing people he’s on the right track.

For the following stories, please click on this link*

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(*Please note, The contents of this e-shot been prepared for general information only. It does not contain all of the information which an investor may require in order to make an investment decision. If you are unsure whether this is a suitable investment you should speak to your financial adviser. This information is not guaranteed to be correct, complete, or accurate. FE Research is a division of Financial Express Investments Ltd, registration number 03110696, which is authorised and regulated by the Financial Conduct Authority (FRN 209967). For our full disclaimer please visit www.financialexpress.net/uk/disclaimer. Data Sourced from FE Analytics, and Bloomberg Finance LP.)

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