Wyn Thomas - Axys Investment Management

Weekly Market Commentary 19th July 2019

WHY ITS TIME TO REVIEW MONETARY POLICY INDICATORS

This week the world has been focused on those two hardy perennials, Trump and Brexit. The former for being racist and the latter for parliament acting to contain the new prime minister. At this point however, these events hardly qualify as news. Instead we’ve been taking a closer look at the finer points of monetary policy. Following the Fed Chairman’s admission that the link between economic growth and inflation might not be what it was, we find multiple instances of central banks rethinking their approach. The European Central Bank is looking at revising its 2% or below rule to be more accommodating of above target inflation, while there is also speculation a Labour government could increase the BofE’s 2% target in the future. Read more…