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Markets had a strong start to the year as it appeared likely a soft landing would be achieved. Although investors pared back the number of expected rate cuts this year, this came as a result of a more resilient global economy. Furthermore, it seemed as though central banks had successfully muted inflationary pressures with their series of rapid interest rate hikes.

Some of the world’s most renowned investors have made their fortunes by betting long – buying a stock, commodity or currency expecting the value to go up. Warren Buffett is probably the most recognised investor who adopted this approach.

At the start of 2024, the pieces appeared to be falling in place for President Joe Biden in his re-election year.

The conventional wisdom behind raising interest rates is as follows: higher interest rates make the cost of borrowing more expensive, which tends to cool the housing market.

As events continue to unfold in the Middle East, we are reminded how precarious the geopolitical landscape is.

For Jerome Powell and other members of the Federal Reserve (Fed), the Consumer Price Index (CPI) print this week was well and truly a fly in their ointment.

In the first quarter, bond and equity markets decoupled as investors pared back the number of expected interest rate cuts this year, driving a fall in bond prices.

Last year, as billions of dollars’ worth of debt neared maturity dates, many borrowers faced potentially debilitatingly high refinancing costs, raising fears of widespread defaults. But these fears are abating, leaving companies rushing to sell debt in a resilient bond market.

In what’s been a highly charged week for developed market central banks, for once, attention moved East.

The European Central Bank (ECB) met last week, and given economic growth remains mixed and inflation is coming down slower than anticipated, members strongly indicated their first rate cut would be in June.