Roll With It (Then Pivot)

The Fed had been rolling with it in recent months. Labour market data had been robust on the surface, enabling the Fed to keep the focus on the inflation side of its mandate. But more than a few question marks around the true health of the US labour market have emerged. As expected, last week brought the Fed pivot. Fed Chairman Powell indicated rate cuts are on the way. But many think the Fed is late. And markets think the Fed will be cutting faster than the Bank of England over the coming year. Over here economic growth still looks solid, and while that’s being reflected in a number of sectors, it’s not yet boosting tax revenues.