The pound initially edged up after the BoE’s decision, but pared those gains to trade slightly lower on the day at $1.3622. The U.S. dollar was choppy on Thursday as traders parsed the Federal Reserve’s measured stance on further interest rate cuts, while sterling held steady as the Bank of England kept rates steady and […]
Euro zone business activity expanded in August, PMIs show. European stock markets fell slightly in early trading on Thursday, hovering just below recent highs, as traders avoided making big moves and waited for the Federal Reserve’s three-day annual Jackson Hole symposium. Jackson Hole starts on Thursday and focus will be on Fed Chair Jerome Powell’s […]
Standard models of asset pricing assume that risky (safe) financial assets have higher returns because they have higher (lower) exposures to systematic risk factors. They also typically assume that these exposures to risk and the degree of co-movement across assets are the same in good times and bad times. Yet, there is ample evidence that […]
Despite headlines dominated by threats and implementations of US and retaliatory tariffs since President Trump’s inauguration, it was not until his “Liberation Day” announcement on 2 April that equity prices fell significantly. This column asks why equity prices reacted so slowly to the elevated trade policy uncertainty that followed immediately after Trump’s election. Historical evidence […]
