if you don't honestly know what Jackson Hole is, and even if you do, wrap your ears around this podcast I did with @chrisgiles.bsky.socialwww.ft.com/content/e3e4...
Central bankers are meeting in the mountains this week. Markets will be listening closely to the chair of the Federal Reserve.
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In 2020, Powell introduced flexible average inflation targeting. In 2022, he poured cold water on hopes of an end to rate hikes, causing l-t yields to rise by 100 bps subsequently. This year he may announce that the extent of US rate cuts, which start on 18 Sept, will depend on the labour market.
Next week, the central bankers' annual business trip to Jackson Hole is on the agenda. Fed Chairman Powell will give his speech there on Friday at 4 pm continental European time.
While yields on safe haven government bonds rose slightly, risk premia in the credit markets continued to fall. The iTraxx Xover closed the week 30 bps tighter at 299 bps.
So we have less US inflation, but also robust growth figures and therefore no clear signal for a strong Fed rate cut in September. The implied probability of a 50 bps rate cut has fallen to 20% and the market is now pricing in 95 bps of US rate cuts by December, down from 121 bps last week.
Quick recap on last week’s market developments. US consumer prices rose slightly less than expected in July (core CPI +0.17% m/m and 3.2% y/y). Also, US retail sales rose strongly, initial jobless claims were lower than expected and Walmart reported sales growth of 5% last quarter.
Delighted to announce that the FT Visual Vocabulary is now available in German, courtesy of a superb translation effort by Max Melchior Lang. Check it out along with all our other translated editions — Spanish, French, Japanese, Chinese — here github.com/Financial-Ti...
If there's going to be an X..odus from Twitter/X (and I think there should be) let's make it a coordinated one. My thoughts on how and when. www.prospectmagazine.co.uk/ideas/techno...
Twitter/X has become a cesspit of racism, bullying and unpleasantness. Has the time have come for a mass X-odus and shall we name the date?