For a year now investors had been positioning themselves for the time when the Federal Reserve decides to lower the cost of borrowing after keeping at ay 5.5% since July 2023. The move, the thinking went, would signal that inflation had been reined in and soft landing had been achieved.
Whether or not it is due to some members of the globe's wide investment suite downing tools for the Northern Hemisphere summer, a touch of divergence from central banks or a shifting geopolitical landscape in the Middle East, is rather difficult to say, but markets are suffering a small crisis of confidence.
Such is the world that we live in that state sponsored murder is measured in geopolitical risk to markets rather than any outrage at cross border assassinations. Whether or not this proves to be the case in the killing of Ismail Haniyeh, the leader of Hamas, in Iran will no doubt come to light, but such incidents remind the market on how it should not take the Middle East as a contained issue.
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