Agility on the central bank front

14 March 2019

The central banks appear to have taken a relatively quick about-turn in their monetary policies. The US central bank (Fed) will refrain, for now, from making further interest rate hikes and is considering ending its balance sheet reduction measures. The European Central Bank (ECB) followed the Fed’s example at the start of March and announced it would keep the key interest rate unchanged at least until the end of the year.

The markets have reacted to the central banks’ change in policy and both equity and fixed income investments have risen from their turn-of-the-year trough. Over the past decade, fighting against the central banks has been a poor investment strategy. What about this time around?