US interest rates - what goes up, must come down

Assessing impact of recent rate hike

Daniel Murray of EFG Asset Management

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 ...

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