Investors’ concern about an increasingly uncertain environment is increasing as the Norwegian interest rates reduction – shock on Thursday emphasizes how US duties, the Middle East conflict and an unstable dollar make it even more difficult to predict global monetary policy.

Norway’s crown fell about 1% against the dollar and the euro, in a sign of how unexpected the interest rate reduction was by 0.25% after 5 years.

At the same time, Switzerland, which reduced borrowing costs to 0% on Thursday, denied expectations between traders to return to negative interest rates in the country affected by deflation, as its central bank warned of a blurry world.

Just a day earlier, the US Federal Bank kept interest rates unchanged, and President Jerome Powell said “no one” is aware of the course of interest rates in the future.

In addition, the shares were removed from their recent peaks.

Vigilance

“We are in a moment of significant policy and macroeconomic uncertainty,” Bluebay’s leader in RBC Global Asset Management, Mark Douding, told RBC Global Asset Management. “We can’t see a clear trend in interest rates,” he added.

Volatility is expected to increase, some investors said because dollar fluctuations and oil prices affected by the geopolitical situation do not provide central banks and markets clarity for a roadmap for the future.

The dollar factor

Central banks also find it difficult to navigate in a new era where the dollar, the cornerstone of world trade, the prices of basic products and assets, has become weaker and more volatile under the pressure of trade war and US public debt.

“This is a huge, fundamental shift to world markets that everyone is trying to evaluate,” said Nick Reese, head of Monex Europe’s macroeconomic research. “All of these typical economic empirical rules we use for forecasts are completely violated at the moment,” he said.

The dollar has fallen by almost 9% against other important coins this year, but has risen after a warfare between Israel and Iran.

Francois Villeroy de Galhau, European Central Bank policy manager, said on Thursday that the ECB may need to adjust its plans to reduce interest rates if oil prices are long -term.

New Status Quo

The new status quo in the markets could well be a time of surprises from central banks that will create rapid displacements in market narrative, pricing of assets and volatility tendencies, analysts said.

“We are entering this next cycle in which variables are much more volatile, because, instead of monetary policy being easily predictable, events are simply taking control, and politicians and human players, as we now know with Donald Trump, play an important role,” said European Director.