Call me old fashioned if you like

First, for the boring stuff, the US CPI came in above expectations, and as a result, equity and bond prices fell. At one point at the start of the year, rate expectations were for six cuts; now, many think we may get just one after Wednesday’s CPI print, some now think none, and others still think three is on the cards. Anyone of those could be right; most bases are covered, to be fair. If I were a betting man, I believe the Fed will be one and done this year. The rationale for this is simple: Powell has said that monetary policy will remain restrictive even if they cut, so a tick in the box for a snip if not a trim or a full cut. If they don’t go in June, why July and then August, they don’t meet for the holidays? Come September, the US elections are in full flow; will they want to be seen adjusting monetary policy then? Probably not, so that leaves June and possibly one more in December, but that will be it. There you go, that’s my prediction, we shall see; like most everyone else’s predictions this year, I am probably wrong.

In contrast to consumer prices, Thursday’s Producer Prices came in slightly better than market expectations. This news did not help bond investors much, who were still reeling from the previous day’s news, but it did lead to a rally in stocks, which seem remarkably resilient in the face of higher tighter for longer.

I raised the topic of gold and its ever-rising price a week ago, and it still seems to be ever-rising, hitting new highs yesterday. Most market commentators have caught the gold bug, trying to explain or understand the rise. The best answer is to blame central banks for buying and pushing prices higher; surely, they have better things to spend their money on?

Lastly, Lloyds bank announced they were cutting back risk managers; shock, horror and awe was this news greeted by the media. How irresponsible could they be? Surely, banks need more risk managers than less. As my father once noted during the crash of 2008, the world has never had more risk managers and has never been a riskier place. Risk managers are generally a disaster, not questioning things when they should, allowing boards to abdicate responsibility, and panicking when they shouldn’t. Managers and bosses should take back more responsibility for their risks, not outsource to a risk manager. Most small businesses do not have the luxury of a risk manager but always remain vigilant about the risks around them and oversee accordingly. The world needs fewer risk managers and more managers willing to accept responsibility to my mind.