Bank of England to stand pat after Fed cut, whats next for markets?

"Chair Powell pulled off a bit of a Jedi mind trick. "This is not the meeting you are looking for", he seemed to tell markets, saying it was a "risk management" cut - having just delivered a rate cut despite unemployment forecast to remain steady and low, growth to pick up and inflation to rise. Everything the market's stormtroopers wanted was there in front of them, but Powell managed to somehow deflect attention."

"The fact Waller and Bowman didn't also dissent maybe helped Powell out. The fact the committee didn't seem to fall in behind the doves with their dot plots helped to soothe bond markets. But the market saw the dot plot and statement as pretty dovish, with the dollar plunging at 2pm eastern time yesterday before snapping before during and after the press conference with Powell."

The Federal Reserve delivered an interest rate cut while markets reacted unevenly. Policymakers prioritized the labour market and signalled tolerance for a bit higher inflation. The cut appeared partly political given the committee's forecasts, and observers saw signs of fiscal dominance as rates stay low amid record borrowing. Chair Powell characterised the move as a "risk management" cut and diverted attention despite forecasts showing steady unemployment, rising growth, and higher inflation. Dot plots and the statement were viewed as dovish, prompting a dollar plunge and mixed stock reactions, with financials and big tech diverging.

Read at London Business News | Londonlovesbusiness.com