Daily Commentary

MarketMinder’s View: If you want an illustrative example about the squishiness of polls, see the special Jackson Hole edition of the CNBC Fed Survey featured here. Among 31 respondents, which include economists, strategists and investors, 80% (or around 25 people) think Fed Chair Kevin Warsh should provide more insight about his economic views—yet there is no consensus (48% to 48%) about whether the Fed head should share his rate outlook. So most respondents want Warsh’s opinion about the economy (which the Fed has little influence on), yet they are mixed on his interest rate views (an area where the Fed can at least have a modicum of influence)? To add to the inconsistency, “Yet, 65% of respondents agree with Warsh that the Fed would benefit from talking less and getting a more unfiltered view of market signals on where rate policy should be.” We are confused—so central bank observers want more Warsh analysis about GDP and inflation yet they also think the Fed should talk less? Folks, this is why investors need to take all this speculation about what the Fed will or won’t do with a grain of salt—the noise conflicts and contradicts, as commentators themselves don’t know what they want. The chatter can fill headlines on a slow news day, but it won’t reveal future Fed actions. Focus on what central bankers do, not what they do (or do not) say. For more, see our early-August commentary, “Digging Into Last Week’s Fed ‘Credibility’ Concerns.”

MarketMinder’s View: Another day, another datapoint highlighting businesses’ resilience amid a difficult situation in the Strait of Hormuz. “About 6 million to 8 million barrels a day of crude are now being shipped through the world’s key oil chokepoint, according to estimates from oil traders involved in and monitoring cargo activity. …  There are signs that producers across the region have been moving more oil in recent days. To enable that, a batch of tankers are doing shuttle runs, hauling barrels to just outside the Persian Gulf. Once the shuttle ships get there, their cargoes are then collected by waiting tankers that remain unwilling to go through the strait themselves. Every major regional supplier bar Iran is now selling its barrels for collection outside Hormuz.” We have pointed out how global oil supply fears have long been off base considering production outside the Middle East and workarounds to get oil past the chokepoint. But this shows those in the hot region are still finding ways to get their goods out to the global economy through Hormuz, too—proving another an early-year fear false. For more, see our July commentary, “On the Chop in the Oil Market.”

MarketMinder’s View: Please note, MarketMinder is nonpartisan and doesn’t prefer one politician or political party over another. Our interest is with politics’ economic, market and personal finance implications only. As always, we advise taking politicians’ words with many grains of salt, and UK Prime Minister Andy Burnham is no exception. However, we did find the rhetoric shared here interesting. For all the presumptions of a “leftward lurch” after Burnham replaced former Prime Minister Keir Starmer, reality has so far been rather benign. With many businesses allegedly worried that Chancellor John Healey’s October Budget will introduce big tax hikes, “Burnham said he was aware such speculation could chill investment and that he had therefore decided to hold the Budget ‘at the earliest date we realistically could have done’ in October—a month earlier than Rachel Reeves’ Budget last year. He is expected to make cutting the cost of business one of his themes in a statement to MPs when the House of Commons returns from its summer break next Tuesday, with improvements to energy-grid connectivity a key policy. … Burnham also insisted his plan for more public control over key industries would not mean a wholesale state takeover of utilities, as he and his ministers ponder what to do with financially stricken Thames Water.” Mind you, we aren’t cheering these pledges—talk is cheap. But for all the handwringing over a Burnham premiership imposing “anti-market” policies, the PM is behaving like a regular politician in toning down extreme-sounding campaign rhetoric—evidence that fearful expectations may very well have overrun reality. We shall see when the Budget itself drops, but there has long been a habit among investors to buy political narratives and personalities in Britain that outkicks what these people can actually achieve once in office. It won’t surprise us if the “leftward lurch” is the latest theory that proves overheated hype.