Estados Unidos

As the major central banks once again mull their policy options, they face a daunting task. They must phase-transition inflation back to imperceptible, without phase-transitioning unemployment to perceptible. This report explains why this will prove impossible, and what central banks will likely prioritise. Plus: the collapsed complexity of the recent stock market rally signals excessive trend-following. Until the complexity normalises, we are reluctant to chase the rally.

This Strategy Insight discusses the bond market and currency implications of the Fed’s “hawkish pause”.

In response to the first-ever federal indictment of a former President, investors should focus on the state of the economy and not on Trump’s legal trouble. They should also use the current market rally to stock up on protection, as a recession is still likely, albeit delayed.