A hawkish turn from the central banks

Wednesday 22nd November 2023

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The FOMC minutes were cagey when it came to the prospect of rate cuts. The RBA minutes were the same, with Michelle Bullock also reiterating her concerns about persistent wage inflation. And the Bank of England’s Andrew Bailey told UK politicians that markets were getting ahead of themselves when it came to pricing rate drops. Hence the mood is a little more sombre, with falls in equities and little movement in bonds. Oil has also been up and down today ahead of OPEC+ at the weekend. There are geopolitical factors at play too – a budget crisis in Germany and fears Iran is supplying ballistic missiles to Russia. Today it’ll be interesting to see if the inflation expectations from the University of Michigan survey fall back down, after their surprise lift last time.

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