US interest rates - what goes up, must come down

Assessing impact of recent rate hike

clock
Daniel Murray of EFG Asset Management
Image:

Daniel Murray of EFG Asset Management

The path towards the normalisation of US interest rates has developed a new twist, says EFG Asset Management's global head of research Daniel Murray - an increase in rates over the next two years followed by a reversal.

The Federal Reserve recently raised its benchmark short-term interest rate by a quarter percentage point and signalled that two more hikes are likely this year. The decision moves the funds rate target to a range of 1.75% to 2%. The Federal Open Market Committee (FOMC) changed various phrases in its statement relative to the previous one, highlighting a more optimistic view on economic growth and higher inflation expectations. Wages and prices The modest increase in US wages seen in recent years was cited as a 'surprise' by Jerome Powell, the new Fed chair, at his first FOMC press ...

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 US

Amazon shares are down 40% from its peak

Growth stock pickers feel like 'a kid in a candy shop'

'It is time to go shopping'

clock 22 June 2022 • 4 min read
Markets are generally positive in months with rate rises
US

Rate hikes could have 'benign' impact on equities

Follows Fed 75bps hike

clock 20 June 2022 • 1 min read
Sectors in the US stock market that have been leaders over the last decade have come to a sudden stop in terms of their outperformance of the broader market since the start of 2022.

Deep Dive: A paradigm shift for US equities

'Valuations matter'

clock 15 June 2022 • 5 min read
Trustpilot