For two years, the answer to almost every money question has been the same: wait and see what the Fed does. On Friday, the Fed's new chairman said he is not going to tell you.
The Big Story: The Fed Switched Off The Signal Everyone Was Waiting For
If you have been sitting on cash, putting off a currency conversion, or leaving a pension alone until the interest rate picture settles, Friday changed your position, and no rate moved to do it. The chairman announced that he will stop signalling where rates go next.
Kevin Warsh gave his first Jackson Hole speech as chairman of the US Federal Reserve. On the Fed’s habit of telling markets what it plans to do, he was blunt: “You can call it an outline, you can call it a trail map, just don’t call it forward guidance.” On his own position: “I stand here today committed to a discipline, not to a decision.”
He added that the summer’s better inflation numbers do not convince him the trend has improved. Within hours, traders flipped from expecting a September hold to expecting a rise.
The effect reaches further than a trading desk. Suppose you earn in Singapore dollars, hold euros from a previous posting, and carry a pension in Europe you have not looked at since you moved. You have been waiting for the picture to clear. That clarity was never coming from a forecast, and now it will not come from a hint. What is left is what you control: which currency each pot sits in, what it pays for, and when you need it. None of that depends on knowing what happens on 16 September.
If you are holding cash and wondering what to do with it, that is a half-hour conversation. Book a time here.
What Else Is Moving
Four central banks, four directions. The Bank of Thailand held at 1.00% on Tuesday, its lowest since 2022, and said it has room to cut if growth stays soft. Bank Negara Malaysia meets Wednesday and is expected to hold at 2.75%. The US may be going up. The Bank of England has not moved from 3.75%.
Oil fell, and the explanations do not agree. Brent dropped about 4.6% to $90 after Iran and Oman announced a framework on 26 August for a temporary shipping corridor through Hormuz. Then the accounts diverged. Iran’s deputy foreign minister said on Saturday the strait remains closed. US Central Command said Iran does not control it. Around 6,000 sailors are still stranded in the Gulf. Citi, Goldman Sachs and Morgan Stanley all forecast Brent between $75 and $80.
The tax-free lump sum rumour is back. The Institute for Fiscal Studies has proposed cutting the amount of a UK pension that can be taken tax free from £268,275 to £100,000. It is a proposal, not a Treasury plan, and the Budget is on 28 October. The last time this rumour ran, people took their lump sums early to get ahead of it. The Budget changed nothing. Separately, and this one is real: HMRC’s consultation on the minimum pension age rising to 57 closes on 28 September.
Sterling had a poor week nearly everywhere. It fell against the dollar, the euro, the ringgit and the Singapore dollar, and rose only against the Thai baht. The ringgit strengthened for a second week running, this time while oil was falling, having done the same the week before while oil was rising.
The Expat Takeaway
A lot moved this week, and most of it was people changing their minds about the future rather than the future arriving.
The portfolios that handle a week like this were built before it started. Two questions worth sitting with.
If your next large expense is school fees in Singapore or a property in Europe, is the money for it already held in that currency?
And if the Fed does raise rates in a fortnight, does anything in your plan have to change?
If nothing does, this is a week to watch. If something does, the issue was never this week.
One thing has genuinely improved this year. Safe, short-dated income is paying more than it has in years, and collecting it needs no view on the Fed. It is the only thing the waiting was ever going to buy you.
Until next week.
Cip | Bratu Capital
Managing wealth for globally mobile professionals across Southeast Asia.