While the fact that both franchises have new films out this year probably has little bearing on the direction of FOMC decision making (although it does bode well), it does serve to highlight just how long it has been since the US saw such a thing.
Indeed, it is partly because interest rates have been prone on the mat for so long that the market expects the Fed to move at the conclusion of its meeting tomorrow. The argument goes that, by raising rates now it is giving itself more of an ability to cut rates again at a later point should it need to.
Of course, the counter to that is, that by doing so too soon, all it is doing is hastening the point in time when it will need to once more cut rates. Another reason why markets expect the Fed to move tomorrow, is the credibility issues it would face should it decide to hold again.
As Ben Gutteridge, head of fund research at Brewin Dolphin points out, it has been talking about raising rates for much of the year, but has been repeatedly stymied.
"It is not about how hard the Fed can hit, it is about how hard the US can get hit!"
“There are certainly credibility issues at the Fed and that is likely driving this policy decision,” he told the PA Podcast, adding: “Yes the labour market is strong but inflation data, profits data, the amount of spare capacity in the economy and wages do not point to a desperate need for a rate hike, but if they weren’t to do it now, there would be real credibility issues.”
The problem for Gutteridge is that the Fed has done more than just back itself into a corner regarding a first hike, it has backed itself into a corner with regards the start of an entire cycle of hikes.
“It can’t come out and say we are only making one hike and then will see how the economy responds, because if your economy can only stomach one hike it is in such a fragile state that you shouldn’t be hiking at all,” he said.
“So, what they are saying is that the economy is now strong enough for us to start a process of normalisation. And, if this is the implication it will struggle with credibility issues again if it doesn’t make regular hikes.”