In a World of Uncertainty, Yield Curves Are Certain

This week was billed as the most important of the year in terms of the global economy, with the Federal Reserve, European Central Bank and Bank of Japan all meeting to set monetary policy, high level economic data out of the U.S. ranging from inflation to retail sales, the fallout from the disastrous Group of Seven meeting, the U.S.-North Korea summit in Singapore and the looming tariffs on Chinese goods by the Trump administration.

So what did we learn? That despite the back and forth over trade, the obnoxious tweets, the rather kind overtures to North Korea and Russia, and admonitions of our traditional trade partners, the one constant in this sea of uncertainty is the Fed and its overwhelming influence on a flatter yield curve. Without wasting too many words, just know that the Fed delivered another a hawkish mien on Wednesday with Chairman Jerome Powell sounding quite bullish and the central bank basically projecting an interest-rate hike every quarter from now until the 2020 Presidential election.