Vive la Revolution
2017 is a critical year for European politics not to mention the triggering of Article 50 and Trump.
It’s tough training to be a doctor. There’s the sheer volume of stuff you need to know, the famously long hours worked by junior doctors, and the ever-present knowledge that a mistake could have grave consequences – one medicine lecturer I knew used to slap his forehead and exclaim “Doh! You killed another patient!” when a student gave him the wrong answer to a question.More
Following the FOMC’s decision to raise the Fed funds target by 25bps to 0.25%-0.50%, Fed Chair Janet Yellen hosted a press conference with a Q&A session. For analysis of the move itself and the committee’s accompanying statement, please see our reaction note ‘The start of a gradual normalisation’.
The FOMC meets on Tuesday and Wednesday next week, with the release of its decision, the accompanying statement and Projection Materials (including the ‘dot plot’ of member interest rate projections) at 19:00 GMT on Wednesday. Below our Economists preview this historic event.
See what our Economists say about how monetary policy divergence will be a key theme for the global economy next year. The US looks set to see rate rises, albeit gradual ones.
The Sterling-Dollar exchange rate has seen plenty of volatility in the last couple of years, flying high up to the 1.7 mark on UK GDP outperformance and US easing through QE, before tumbling back under 1.5 as the run ups to the Scottish Referendum and General Election caused Sterling weakness at the time the Fed ended QE and started talking about future raising rates.
In the first three months of 2015, the value of the euro fell 10 per cent against sterling. Since a stronger pound makes UK exports relatively less competitive in other markets, for a company doing business in the Eurozone, such a sizeable move could have had a significant impact on their profitability. Plenty of firms have a profit margin of a similar magnitude.