Managers take cautious approach ahead of expected US rate rise

Two increases predicted next year

Daniel Flynn
clock • 7 min read

Asset managers are widely anticipating a US interest rate increase to be announced by the Federal Reserve, but expect chair Janet Yellen to "disappoint" markets with a dovish outlook in the face of President-Elect Donald Trump's expansionary fiscal policy plans.

Following a two-day meeting of the Federal Open Market Committee (FOMC), the Federal Reserve is expected to announce an increase in the target range for its federal funds rate to between 0.5% and 0.75% later today, up from 0.25% to 0.5%. The move would come a full year on from the Fed's last rate hike in December 2015 - its first for over a decade - and has already been widely priced into markets, with federal funds futures implying a 100% probability of a rate rise since 21 November, up from 75% before the US election. Despite the likelihood of a marginal increase, many eyes will be ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

More than half of IFAs feel negative about a potential Labour govt

More than half of IFAs feel negative about a potential Labour govt

Advisers favour Conservatives when it comes to their clients and business

Isabel Baxter
clock 09 May 2024 • 2 min read
Elections and advice: Planning in political and legislative uncertainty

Elections and advice: Planning in political and legislative uncertainty

‘It should not be based on speculation, always plan on current legislation’

Isabel Baxter
clock 08 May 2024 • 3 min read
'Discussion-worthy stuff': Chinese assets under pressure

'Discussion-worthy stuff': Chinese assets under pressure

China has an 18% share of global GDP and only a 3% MSCI ACWI weighting

Chris Justham
clock 02 April 2024 • 2 min read