The US Federal Reserve has left the US target interest rate unchanged at 2.25 – 2.5%. Kevin Doran, chief investment officer at AJ Bell, comments:
“It’s clear now that, despite the initial bravado accompanying Jay Powell’s appointment, the Fed - just like every other major central bank - has found itself backed into a corner on policy. Despite protestations to the contrary, it seems evident that the Fed is kowtowing to stock market reaction to the prospect of higher interest rates and increasing levels of political interference.
“It is all too obvious that nothing of significance is likely to happen on rates until such time that the asset price inflation being stoked by the current economic backdrop seeps its way into ‘real world’ inflation on the high streets. Maybe we should cut out the middle-man and leave Trump to announce rates on Twitter?”