Meanwhile, the pound is slipping against the US dollar this morning, even after the Bank of England’s monetary policy committee (MPC) voted to cut its key base rate by a quarter-point to 4% yesterday.

The pound is down 0.13% against the dollar, although it is still above $1.34.

While the Bank has cut rates, it was one of the closest decisions since its independence more than 25 years ago with a 5-4 vote split. The market has lowered its expectations of another quarter cut point this year, in contrast to growing expectations that the Federal Reserve will cut interest rates in the US next month.

On Thursday, Donald Trump said he will nominate Stephen Miran to the Fed’s board of governors for four months, and reports suggest that current governor Christopher Waller is the favourite candidate to serve as the next Fed Chair.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says both men are viewed as dovish, which should align with Trump’s ambition for lower rates.

However, the US 2-year yield has barely reacted—reminding us (again) that rate cuts don’t always lower borrowing costs if they aren’t seen as credible or justified. Remember last September, when the Fed unexpectedly slashed rates by 50bps? The 2-year yield jumped nearly 30bps over the following two months. For now, markets still expect the next cut to come in September, keeping the S&P 500 near record highs despite trade uncertainty and policy inconsistency.