Have the Fed and the BOE missed the boat on hikes?

It's been my long held belief that CB's desperately want rates up? Why? Because they've said for so long that rates too low for too long does more damage than good

It also doesn't give them any wiggle room to adjust policy to short-term problems in the economy. If an economy (in normal times) has a little downturn CB's can give it a shot in the arm with a little rate cut

The problem we have today is that there's next to no room left on rates and CB's like the Fed, ECB and BOE (to a lesser extent as they have a 0.50bp margin) are in a corner where the only real choice is more QE. They certainly don't want to go negative on rates. QE is a big palaver. It's not a tap that is easily turned on and off and it has to run for a while to see the effects and creates a bigger mess further down the line. A move in rates is a pretty simple thing by comparison

The UK has long been the blueprint for recovering countries. We grew through 2013/15 and now we're finding that brick wall in front from a weak international market. The US isn't doing badly but that's also been down to domestic growth. For many months exports have shown that the US is heading for a brick wall of its own

The reason the CB's have messed up is that they had an opportunity to raise rates even as long ago as last year. Whatever your arguments both the UK and US could have handled a 0.25bp or even a 0.50bp rise in rates. What that would have done is given them the margin to see out this year, and whatever weakness got thrown at them, with the knowledge that if it lasted they could cut rates again and give that shot in the arm. Yes the market may have thrown a fit and accused them of panicking but the reality is that they would have been acting in a much normal fashion than they have been for the last 3-5 years

I think they've all missed their real window of opportunity and they know it. That won't stop them raising but now they might just be doing it at the wrong moment

They want to get back to "normal" but by their own actions they might have a longer wait for that to happen

CB's have missed the boat on rate hikes