Stick: US economy may not be robust enough for extended rate rises

Three hikes planned for 2017

Carl Stick, manager of the £1.3bn Rathbone Income fund, is concerned the US economy is not as strong as it needs to be if the Federal Reserve intends to continue on its path of interest rate increases.

The manager (pictured) has warned the US could go into a recession if the central bank starts raising rates at a pace the economy cannot withstand.  In mid-December, the Fed lifted interest rates by another 25bps to 0.5%-0.75%, marking its first move in a year, and also raised its forecast for 2017, with three rate increases now expected this year instead of two. "I am still wary the US economy may not be robust enough to withstand extended rate rises," Stick said. "President-elect Donald Trump says he is going to spend and cut taxes, so what does this mean for the fiscal deficit? ...