This week, I asked a flock of financiers at a New York conference to predict the direction of American interest rates. The results were clear-cut.
More than nine-tenths of those investors said they now presume that the US Federal Reserve's next move will be to cut rates rather than raising them.
Moreover, three-quarters of the group expected two or three rate cuts over the next year.
Wall Street, in other words, thinks the interest rate cycle has turned — with a vengeance. That is startling, given that a mere month ago the futures market implied there was only a one-in-three probability of a rate cut this year (and six months ago many investors were expecting more rate rises.)
Indeed, it is difficult to remember a recent time when sentiment has changed so far, so fast in the US Treasuries market — or not without a tangible recession or financial crash.
Why? The lazy explanation is economic fundamentals. These have certainly played a part.
American industrial output and capital expenditure, for example, has weakened markedly in recent months, almost certainly as a result of trade wars. Last month the purchasing managers' index hit 50.5, the lowest reading for almost 10 years.
However, economics is not the sole explanation. After all, it also emerged last month that American consumers feel more confident about the economy than at any point since 2000, and household spending remains moderately robust, as unemployment touches 50-year lows. That is not easy to square with rate cuts.
So if you want to understand the sentiment shift I suspect that you need to look beyond the hard economic data at some "soft" psychological factors.
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One of these is geopolitics; or more accurately the fact that investors seem increasingly hard pressed to predict — let alone price — the risks associated with the various potential wars bubbling around the world, be they of a military or trade variety.
They also find it hard to price the impact of some western political scenarios, including ones in which Labour party leader Jeremy Corbyn, an advocate of nationalisation, ends up in charge of the UK; Elizabeth Warren, who favours strong regulation, becomes the Democrats' presidential nominee in the US; or anti-establishment groups win more ground in continental Europe.
"When our investment committee looks at the alternatives, a [Donald] Trump victory in 2020 almost looks conventional," one financial luminary admitted this week.
As Pimco observed in its recent secular outlook: "The populist challenge from both sides of the political spectrum . . . could result in either positive or negative economic and financial market outcomes."
That is code for "nobody knows" — and investors typically react to such uncertainty by buying bonds.
A second psychological factor is uncertainty about the Fed itself. This year there has been a welter of speculation about whether Jerome Powell, chairman, will bow to Trump's demands to cut rates. However, the political saga is only part of the tale.
What is even more interesting is that the Fed recently embarked on a big internal review of its policy setting process. Some of its analysis is achingly technical.
However, investment group BlackRock suspects the Fed "could announce significant changes to its monetary policy approach early next year".
That this review has been launched at all reveals an important point: behind the scenes there is a growing conviction at the Fed that structural economic changes — such as demographics and digital innovation — will keep US inflation low for a long time.
If so, the so-called "neutral" level of interest rates that neither stimulates nor restrains the economy will stay very low for a long time. "We may not see the rates we used to consider normal again in our careers," one veteran Fed official recently observed. No wonder investors are reassessing the outlook.
Future historians may yet make hay from this assessment. After all, there are any number of occasions when economists have declared before that "this time is different" and it did not end well. As Pimco notes in its recent outlook, it would be premature to assume that inflation is slain forever.
But right now, the message from investors is clear: we are entering an era of the Powell "put", when markets will be shaped by the presumption that the Fed will do whatever is needed to avoid a downturn.
We had better hope that this saga ends better than the infamous "Greenspan put" of the 1990s, when Fed chair Alan Greenspan helped create the conditions for the 2008 financial crisis.
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Written by: Gillian Tett
© Financial Times