AMP Oliver’s Insights – US Rate Rise
AMP’s Dr Share Oliver takes a look the impact of the US Federal Reserve’s decision to raise interest rates in this edition of Oliver’s Insights.
A summary of the key points is as follows:
- After much delay and much warning the Fed has finally raised the Fed Funds rate from a range of 0-0.25% to 0.25-0.5%. The move signals confidence in the ongoing recovery in the US economy after the GFC.
- Given ongoing deflationary risks and slow global growth future Fed hikes are likely to be cautious and gradual.
- With the Fed decision out of the way, global shares are likely to resume their rising trend but with US shares as a relative underperformer.
- Bond yields are likely to remain low which should be positive for real assets.
- Rising US interest rates will help maintain downwards pressure on the value of the $A through 2016.
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