Good morning,


There was relatively light trading last week, with volumes about 20% lower than the 30-day moving average. With many institutional managers still out of the office the focus firmly remained on central banks, and the Fed in particular. As we highlighted last week inflation and interest rates are still a long way apart across many key economies. We’ll see the Fed move again in September, with either a move higher of 50bps or 75bps. Whilst the minutes of the July meeting did not shift markets massively last week there were insightful comments from FOMC members, George, Kashkari, and Bullard. Perhaps the most interesting were from Kashkari, who usually holds a more ‘dovish’ stance. The Minneapolis Fed President commented ‘We need to get inflation down urgently. We need to get demand down’.


Inflation in some markets may have peaked over the summer, but with the credibility of central bankers on the line, it is not the time for equity investors to become complacent. The Jackson Hole symposium is likely to provide further food for thought. Within our active top-down investment process, our ubiquitous economic cycle graphic highlights the importance of inflation, economic growth, and interest rates. This remains a focus for us today as it has done for over 30 years.


If you have any questions, please do get in touch.