When and how will the next rate rise be delivered?

clock • 2 min read
Paul Freedman of Beaufort Investment
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Paul Freedman of Beaufort Investment

The most significant consideration for all investors in the US is the actions of its Federal Reserve.

The Fed has gradually increased the Fed Funds target interest rate since December 2015, with the latest 25bps increase in December 2018. Since the Q4 2018 market correction, the Fed has paused and it seems poised to raise rates only once or maybe twice in 2019. A less restrictive approach will be welcome and we can expect this to be reflected in US equity returns in 2019.   The Fed needs to provide economic relief in a potential downturn. In the last three recessions it cut rates by about 500bps. The current target (225bps to 250bps) is unlikely to be adequate. When the Fed does...

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