How to allocate for a change in Fed policy

Gearing up for hikes in 2017

Equity markets are discounting the positive, but not the negative impacts of US President Donald Trump's policies, but it must be remembered that US economic activity was already showing signs of an uptick ahead of the election of Trump as President.

While markets have focused on the positive implications of greater fiscal spend along with cuts in both corporate and personal taxes, there are many other potential policy measures, which if delivered, are seen as less beneficial.  These include tighter monetary conditions which are likely to follow fiscal expansion, and tariffs on trade that could give rise to an increasing use of economic barriers to entry, with negative consequences.  At the same time, eurozone activity has been resilient despite the shocks of Brexit, while on the other side of the world, despite the reformist rhet...