Government shutdown set to add further fuel to global selloff


Government shutdown set to add further fuel to global selloff

This week we got a timely reminder of what really matters as stocks tumbled on the back of the latest Fed rate hike. While the decision was widely anticipated, the market had become convinced that recent events would have changed the banks policy on future rate rises, with expectations dropping absurdly low to just one additional hike in the next two years. This compares to the Federal Reserve forecast of two hikes in 2019 alone, which was reinforced with a statement from Jerome Powell. In a fitting epitaph to 2018 we then got to witness the chaos that follows when stupidity meets reality.

Elsewhere Donald Trump managed to snatch defeat from the jaws of victory, when he turned down an offer to keep the government open after an agreement had been struck between Republicans and Democrats to extend the current financing plans until the New Year. This brings a government shutdown over Christmas a step closer and gave an already depressed market even more to worry about.

Read what the team at FE consider to be significant over the current week.