The end of volatility?

This week the most notable headline came from Jerome Powell, the Chair of the US Federal Reserve, when he announced that he thought interest rates were “just below neutral”. This apparent softening of stance has done wonders to soothe a jittery market, with US stocks rallying on the news.

Whether or not this is materially any different from previous statements and actually signals any change in policy is debatable, but it is definitely what the market needed to hear. This might be the reassurance needed to put an end to the current period of volatility.

Elsewhere an awful lot of attention was paid to a range of “No-Deal Brexit” forecasts, from both the Bank of England and the Treasury. While they caused no end of comment, the information wasn’t new. Crashing out of the EU without any sort of contingency will be bad. Exactly how bad is up for debate, but the Treasury forecast is in that ball park. The Bank of England ruffled a few more feathers with its bleak worst-case scenario, but the worst case scenario for anything is usually pretty bleak, it’s rather the point of the exercise.

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