This week the most impactful story came out of the US, when the Federal Reserve announced it was keeping interest rates steady. This is significant, because while official guidance is for three rate hikes in 2019, many believe the Fed is overly optimistic in its estimate of the strength of the US economy and needs to back off.
The market was convinced this move was coming; now it’s arrived a significant risk of disappointment has been removed. The impact is yet to be determined, monetary policy takes about 18 months to have an impact on the real economy. Elsewhere the Brexit saga rumbled on.
While there were a number of developments in parliament, none of them really mean anything and we expect to be back here again in two weeks’ time. Fundamentally there is one basic choice to be made; leave Northern Ireland behind, or accept some sort of customs union. Without making this choice, no-deal is the default. We expect Theresa May to eventually push her deal through, but that ultimately just means this choice is delayed to the end of the transition period