Making sense of the markets this week: July 31 Jul 30th

With earnings season in full swing, there’s a lot to catch up on this week, as we try to make sense of the markets that defy being described by a simple narrative.  

For some time, I’ve been writing about inflation—and the accompanying responses from governments and central banks around the world—as a dominant theme moving the markets. That appeared to be largely the case this week again, as the U.S. Federal Reserve raised its benchmark lending rate by the expected amount of 0.75%. This brings the key rate to 2.5% and it’s now equal to that of the Bank of Canada. 

The markets appeared to take the move in stride, and they seemed reassured by Federal Reserve chair Jerome Powell’s comments in regards to possibly easing off the interest rate throttle in future months. That’s provided inflation numbers begin to make their down from recent highs…