Central bank policy has helped suppress volatility in the markets, according to Tilmann Galler, global market strategist at JPMorgan Asset Management. “One of the biggest fears in the markets – that rising inflation could lead to a very hawkish policy reaction from the Federal Reserve, the ECB and the Bank of England – almost disappeared on the back of receding inflation pressures in the second quarter. The Fed continues with a slow pace of interest rate normalisation, while ECB and Bank of England policies remain accommodative,” he says.
The question investors will be asking in the second half of 2017 is whether the status quo can continue to be sustained by central bank policy.
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Eleanor Duncan is deputy content plus editor at FTAdviser
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