Both Brexit and US/China trade talks have been sources of uncertainty all year. The news on each has fluctuated between positive and negative which has caused market volatility. This has weighed on bond markets and the Federal Reserve’s outlook (as evidenced by the recent Fed minutes). A case in point was last Friday’s high level US/China meeting and the subsequent announcement of progress towards a trade agreement. This optimism caused the 10 year T to spike about 10 bps and Fed futures rate cut probability dropped from 90% to 70%. This week, the US/China trade talk is less positive (more work needs to be done), while Brexit negotiations seem to be going well in advance of a critical deadline. The 10 year T is at 1.73% (after hitting a high of 1.79% this week), the futures market likelihood of a rate cut is back up to 90%. Inflation: Today’s NY Fed survey of the public’s expectation of long run inflation is at an all time low. It seems that people expect the “new normal” to last a while longer. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners