Yesterday, both the Governor of the Bank of England and the chair of the US Federal Reserve warned there is no way to predict what is coming in the year ahead.
There are just two weeks until the 90-day pause on US President Donald Trump’s trade tariffs expire. And, so far, the US has managed to make only a single trade agreement in that time – and it’s not even been implemented yet.
There’s no telling what will happen on July 9th when the tariffs which caused so much damage to the markets are due to snap back into place.
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Speaking to the House of Lords, Bank of England Governor Andrew Bailey said, “Where is this is going to go to, I’m afraid we don’t know at this stage.” This uncertainty makes it difficult to gauge if and when future interest rate cuts may come.
While the UK is at the mercy of US tariffs, with no control over when and what they’ll hit next, that uncertainty is also impacting the US economy. In testimony to Congress following last week’s decision to hold interest rates steady, Federal Reserve Chair Jerome Powell said, “Policy changes continue to evolve, and their effects on the economy remain uncertain.”
While a fragile ceasefire between Iran and Israel has brought more stability to the Middle East and seen off rapidly increasing oil prices which threatened to increase inflation globally, there are still many forces at play which make it impossible to gauge how much your money will be worth in a few months’ time.
There are no signs that the markets and their exchange rates will become more reliable any time soon.
