Rising interest rates set to boost US bank profits

For most US equity investors, it is all eyes on the Federal Reserve until we see the first lift-off in interest rates. We have got beyond the patch of weak economic data earlier this year and are returning to stronger growth, as signalled by healthy labour market data in recent months.

Throughout this recovery, we have longed to see more robust GDP growth, although modest growth so far has not held back the magnitude or longevity of the six year equity bull market. This lack of runaway growth suggests we are only in the middle of the business cycle, rather than towards the end. In other words, if this is a much longer economic cycle than we have historically been used to, it is likely we have a lot further to go on the upside, even if we only get there gradually. US companies are focused on generating organic growth, M&A and capital expenditure and generally trying ...