As a rule, the Fed and the economy are asymmetric to exogenous geopolitical shocks, unless they lead abruptly to a steep rise in energy costs, bullion prices, and/or foreign exchange value. At time of writing, the aforementioned markets have initially reacted calmly to the Israel raid on Isfahan, a city in Iran. Gold, oil and the dollar were all down at the opening on Friday because no one, including Iran and Israel, seems willing to take this incident any further. In short, it’s likely a pause. I shall therefore review the week in my usual way, resting my views on what is going on in the financial markets in relation to what is happening in the economy.
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A Macro Market View by Hubert Marleau
