The Federal Reserve managed to out-dove the markets yet again in September and now view interest rates as only ‘moderately accommodating’. Given how quickly their estimates of the neutral rate are falling they may well have completed the tightening cycle after only 1 hike. The clear message from the three major central banks was the limit to which monetary policy could be relied upon to drive growth. It seems everyone in power is doing their best to perpetuate this state of denial. World debt-to-GDP has again reached new highs, with governments driving the borrowing via directly running fiscal deficits or by promoting growth in debt elsewhere through policy. Central banks are doing their bit to avoid the admission of a lower level of trend growth and inflation by essentially ‘fixing’ prices in bond, credit and equity markets. Read Vimal Gor’s latest thoughts in his Income & Fixed Interest Newsletter: (VIEW LINK)