Market Insight
Central Banks, Inflation and the Recession Tug of War
Yesterday, the Federal Reserve held interest rates steady at 4.25% to 4.50%, maintaining the level set in December. While unemployment remains low and labour markets strong, inflation continues to hover above the Fed’s 2% target. Fed Chair Jerome Powell emphasised a “wait and see” approach, noting that recent tariffs introduced under the Trump administration have added a new layer of complexity. This has naturally sparked questions about the Fed’s next move and what lies ahead for inflation and recession risks.
In the UK, the Bank of England announced today a quarter point cut to 4.25% but stressed that further rate cuts were not set in stone. This move perhaps signals a greater concern as to the effect of Trump’s trade policies on global growth, rather than the persistence of inflation.
In this article, we discuss:
What’s all the noise about?
- What’s driving inflation concerns?
- What does this mean for portfolios?
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Speak to the team: mps@fundhouse.co.uk.
Risk Warning
This article is provided for information purposes only. All material(s) have been obtained from sources believed to be reliable, but accuracy is not guaranteed. The views and opinions expressed are the views of Fundhouse and are subject to change based on market and other conditions. Fundhouse is the trading name of Fundhouse Bespoke Limited. Fundhouse provides investment management services to professional clients and does not provide financial advice. Importantly, this note does not represent investment advice, and any reader should always speak to their financial adviser before making any investment decisions. Please note that the value of any investment may go down as well as up, and you may lose capital when investing, and the value of your investments may not always increase. Please ensure that you are comfortable bearing financial losses and that you are comfortable taking a long-term investment view of five years or more.
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