- Fed Chair Powell expressed uncertainty at a press conference yesterday over how monetary policy should respond to recent bank failures and near-failures.
- The Fed no longer anticipates that ongoing rate increases will be appropriate to control inflation, instead anticipating that some more policy firming may be appropriate.
- The Fed's economic projections were also released yesterday, with few changes for 2023 but rate expectations nudged up and economic growth nudged down for 2024.
- Markets are now pricing in rate cuts later this year, as they look for guidance from the Fed.
- Bank stocks continue to underperform, with banks coming in dead last among major industry groups in terms of annualised total returns over the past two decades.
Central banks around the world are pausing tightening campaigns as inflation eases and economies slow. Inflation-targeting regimes are keeping their own houses in order, while the US Fed's key inflation gauges fell to the slowest annual paces since late 2021.
Two massive earthquakes on Monday have devastated cities and towns across Turkey and Syria, with death toll of over 16,000. This is one of the worst natural disasters this century, alongside the 2004 Sumatran Tsunami, 2010 Haiti earthquake and 2008 Cyclone Nargis.
A raft of U.S. data and European inflation numbers will give guidance on how the world's top central banks will navigate the way ahead, including the hotly debated "no landing" scenario. Reports on U.S. durable goods orders, home prices, manufacturing and consumer confidence threaten to cement expec