Upside to US market if rate cuts are priced in

Fixed interest portfolio managers believe the US economy will need further interest rate rises to encourage a slowdown. The latest GDP figures at the end of last month showed annualised growth in the second quarter of this year was running at 5.2% while the market was expecting a figure of around 4%. Perpetual believes that further interest rate rises of 0.25% or 0.5% may be needed to take the heat out of the economy and calm any inflationary pressures. Paul Causer, joint head of fixed income at Perpetual, says: "The economy in the US is very strong and there is no strong evidence it is...