Navigating the Fed's upcoming 'insurance' rate cuts

clock
Nabeel Abdoula of Fulcrum Asset Management
Image:

Nabeel Abdoula of Fulcrum Asset Management

In May, risks of a trade shock sharply rose following US President Donald Trump's increasingly aggressive rhetoric towards China.

The Federal Reserve, which had last year been on a hiking cycle, came to the rescue by signalling a rate cut later in the year, providing relief to worried investors.  What does The Fed's change in tune mean for markets? This "insurance" cut aims, as in 1995 and 1998, to prevent worsening US data descending into recession, and it follows a pattern of global monetary easing, with Japan having interest rates of -0.1% and the 'Japanified' eurozone just zero. With the rate cut, however, the highly overpriced dollar will at last be weaker, making emerging market equities and bonds more ...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Multi-asset

Ingmar Przewlocka’s bullishness for the region is not only concentrated in the equities market, as he is also seeing attractive opportunities in the bonds space.

Schroders' Przewlocka places equity bets on Latin America in a bullish commodities play

Low valuations and surging energy prices

clock 24 June 2022 • 2 min read
Alex Wright of Fidelity International

Fidelity's Alex Wright: People have misunderstood OMV Russia exposure

'Sentiment is overly pessimistic'

clock 23 June 2022 • 3 min read
Equity funds managed to stay in positive territory with €2.9bn of new net subscriptions

Morningstar: European fixed income funds suffer €16.5bn net outflows in May

Equity funds remained in positive territory

clock 23 June 2022 • 1 min read
Trustpilot