Asset managers welcome Fed rate hike but warn of 'tricky path' under Trump

Third rate rise since December 2015

Daniel Flynn
clock • 7 min read

Asset managers have welcomed the Federal Reserve's decision to raise US interest rates by 25 basis points (bps), though some have warned pursuing two further hikes this year may be "tricky" if President Donald Trump continues aggressively to pursue deregulation, tax cuts and more government spending.

The Fed increased interest rates by 25bps to the range of 0.75%-1% following a two-day meeting of its Federal Open Market Committee (FOMC). It also said it hopes to raise rates three times throughout 2017. In a statement, the FOMC said it raised rates because the labour market has continued to strengthen since its February meeting, while economic activity has continued to expand at a moderate pace. "Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have ...

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