The latest FOMC’s statement confirmed two things namely a fundamental data and a circumstantial data. Firstly, stock markets don’t enjoy uncertainty especially when, secondly, it results from an artificially constructed certainty.

Indeed, analysts throughout the month of July fueled their certainty to the highest degree of unanimity (100%) in the belief that Jerome Powell and the Fed would start a new sequence of dovish policies considering the political pressure exerted by the Trump administration on the one hand and the fears weighing on global economic growth on the other hand.

But such certainty has suddenly turned into uncertainty now that the Fed’s first interest rate cut since 2008 may ultimately be just a one-off move rather than a first step within a series of similar ones.

Stock markets reacted immediately downward, providing us with further evidence of the difficulty of reducing their relative dependence on quantitative easing (QE) despite the good earnings announced by the majority of large listed companies.

Contents published on do not constitute investment advice.


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