On Wednesday, we got from the FOMC its statement. It did what a prudent Central Bank would do in current circumstances, saying that further evidence of inflation and employment would trigger a rate hike, December being the obvious hint.

So, unsurprisingly the FOMC kept its policy settings unchanged. The statement reads: “The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives”. The Fed also observed that “inflation has increased somewhat since earlier this year”.

Interestingly, its previous reference to inflation remaining low “in the near term”  was absent.

Today, it’s is going to be U.S. employment report Friday.

Traditionally a festival in financial markets where investors speculate on this statistic that will be revised radically and repeatedly in the future.

Normally, everyone likes to pretend this data means something, and with the imminence of the U.S. presidential elections next Tuesday, there will doubtlessly an attempt to spin it even more significantly, but it is not.

If you are out of work in the United States, you already know that you are out of work in the United States. It does not need to be the Bureau of Labor Statistics to tell you that fact and influence your vote.

So, despite the spin and the fevered media commentary, today’s data is less relevant than it normally is.

Public opinion polls in the United States already reflect the economic realities of the United States. Today’s data will not change that.

The story of labor markets and politics has anyway been building for 25 years in the U.S. and elsewhere.

Change in the global economy has created a demographic left behind. A demographic that is low income, low skilled, generally older and generally rural.

This group has turned to populism because scapegoat economics forcedly tells them that everything that is wrong in their lives can be complained on foreigners or some of the minorities in society. This allows the rise of anti-politics whereby politicians suggest that by removing one factor in the economy some miracle cure can be effected.

The problem is that financial markets are made up of people who have not been left behind by the last 25 years and who in fact have tended to do rather well and that has created a situation of incomprehension between markets and populists.

On the other side of the pond, the Bank of England (BOE) has signaled fairly clearly in its just released inflation report that accommodation is off the agenda for now, which reflects a higher inflation outlook as much as anything, although there is a belief that rapid action by the BOE avoided a more negative short-term economic response to the referendum result.

Please keep in mind that BOE Governor Mark Carney is no longer beholden to the façade of an inviolable inflation target and when you as an investor you’d be considering an overshoot of the BOE inflation target it could be helpful not to underestimate the BOE’s tolerance.

Besides that, the UK’s High Court has ruled that Parliament must vote on invoking Article 50. This ruling will be referred to the 11 judges of the Supreme Court, who will decide in December, but Parliament is almost guaranteed to back invoking article 50, so it’s all somewhat mood.

The thing is that most market participants wanted the vote to go the other way, so they will overplay anything that could conceivably bring about that outcome.

Finally, we just got from the Reserve Bank of Australia its latest “Statement on Monetary Policy” that gives investors, among other things, interesting and useful information on global economic growth, inflation, and so on, viewed from down under.

About inflation we read, “… However, in the United States and Japan, unit labor cost growth is noticeably higher than it has been for some time and this has put pressure on business margins. Further gradual reductions in spare capacity are expected to place upward pressure on inflation in advanced economies…”

It doesn’t look like inflation is going to ease again over the near term in developed economies. 

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments.