The biggest news of the past week was President Trump’s threat to force Jerome Powell to resign as Chairman of the Fed, followed by his subsequent suggestion that he was unlikely to do so. Initially, markets took fright but then breathed a sigh of relief. However, economic data suggested that the US economy was resilient in the wake of the imposition of import tariffs around the world, which assisted sentiment.

Nonetheless, expectations remain that the Fed will cut rates by 25bpts later this year. Domestically, retail sales were strong once again, illustrating how consumption continues to grow in contrast with declining investment. The coming week promises to see inflation heading back to within the 3% to 6% inflation target.