News flash Strange shapes and sizes

Strange shapes and sizes

On Wednesday, the US released its inflation figure of 8.5% for the 12 months ending July, against the consensus expectation of 8.7%, this being the lowest year-on-year number in recent months and the first sign the Fed’s aggressive rate hiking policy may be moderating inflation. On the back of this marginal decease in the inflation…

News flash Expectations can shape outcomes

Expectations can shape outcomes

Economists believe that people’s expectations are an important influence in their decisions, whether these be to invest in expanding a business, or to defer or accelerate purchases. Economist John Maynard Keynes labelled the role of expectations “animal spirits.” Consequently, what we think may happen in an economy in the future could determine how we act…

News flash When bad news is good news, inflation

When bad news is good news

On Wednesday, the US Fed hiked its benchmark rate by 75 basis points for a second consecutive month. This in the face of the June inflation number, which came in at a shock 9.1% and above the consensus estimate of 8.8%. Given that GDP fell by 0.9% in the second quarter, after declining in the…

News flash Interest rate pain not consistent

Interest rate pain not consistent

Our first newsletter for 2022, titled The Year of the Fed, outlined why we felt the US Federal Reserve’s reactions to persistent inflation would be the key determining factor in how markets faired this year. What we didn’t know was that their job would become that much harder as inflation had another, and perhaps more…