Policy makers' words herd us all in the same direction

Energy markets reacted briskly and positively to the news overnight from Algiers that oil producing countries had agreed a framework for a crude output cut, potentially before the end of the year.

The fine details of the agreement, led by Saudi Arabia and backed by other Opec members, indicate that what is being said may not turn out to be quite as bullish a reality for oil prices.

However, that is countered by the pleasant surprise that the group was able to come together at all.

This somewhat myopic response, to what is a promise and nothing more, shows how much more effective the words of policy makers have now become in making us all look in the same direction.

While it has ever been thus, the internet and social media has augmented to unprecedented levels the reach and speed with which the subsequent chatter spreads.

It is a phenomenon that has allowed Donald Trump to grasp clumsily for the White House. It has also allowed the Federal Reserve, under Janet Yellen, to make us all dance to its hawkish tune as she and most of her equally gun-shy colleagues choose time and again not to pull the trigger on the interest rate rises that have been promised all year.


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