Founder of Eeagli | Data visualisation, Investment Writer, Content Expert, Equities, Fixed Income, Economics
Are UK interest rates going to fall? What does the market think? I've picked the UK here because the Bank of England's data is superb. It's seems the market has a tendency to get ahead of itself. “The long run is a misleading guide to current affairs. In the long run we are all dead” wrote John Maynard Keynes in his 1923 work, A Tract on Monetary Reform. If your company would like to us Eeagli's services, or you would like to invest in us, send me a free message. Happy 2024! It makes you think, right? Music: A Forest Melody by Tellsonic #Investing #InterestRates #UKMonetaryPolicy
Does make you wonder whether BoE interest rates should have followed the market between 2010 & 2016. The problem with UK house prices soaring due to low interest rates may have been avoided. The argument was that interest rates had to be kept low as the UK economy was to weak for higher rates without a recession. Since rates have risen we're still waiting for the recession.
James Eagle - markets are always looking to the future and will always therefore be ahead of the curve in that sense. Maybe the question should be: Does the pressure of the markets influence the decision? 🤷🏻♂️🕊️
I collect old sci-fi books and enjoy the fallacy of prediction. Some can predict what will happen but nobody can ever predict when. Books such as Last and First Men (1930) by W. Olaf Stapledon predict the next billion years of human evolution, but failed to see the second world war. Foundation series by Asimov makes a good stab at tackling the false faith people place in predictions from authority and use the character of The Mule to set out the difference between prediction and extrapolation. The best recent fallacy of prediction was the fall of Ukraine within days of the Russian attack. Prediction is merely the recording of inherent biases and inconsistencies in a view of the present. There are no experts on the future and all forecasts should be spelled as "G.U.E.S.S.E.S..."
I would also add that the Bank of England’s data is not only superb, but also transparent and accessible! Do we think the Bank of England will follow the market signals…
Love all your posts James Eagle, but this visual is truly spectacular. Thanks for sharing.
If I read this right, OIS and OIS changes are not a good predictor of BoE base rate changes…OIS consistently sloping upwards before a baserate decline. Would long term rates eg 10 yr gilt yields not be a better graph? Happy to be corrected! Great presentation though as always, not meant as criticism!:)
Great visual James Eagle! Investors almost always get rate forecasts wrong (not just in the UK). Now the key question: Are we gearing up for even heftier cuts than what's already on the table, or have investors totally missed the mark and we'll see way fewer cuts than expected?
James Eagle i always love your visualisations. How can I create such line chart?
Superb James.
Founder of Eeagli | Data visualisation, Investment Writer, Content Expert, Equities, Fixed Income, Economics
4moIf you are curious, this is the original chart where I got the idea from.