The trades to consider ahead of a (potential) rate rise next week

Antoine Lesné, head of ETF sales strategy EMEA at State Street Global Advisors, analyses what an interest rate hike by the Federal Reserve would actually mean for investors, and how they should be positioned.

All eyes are on the 16 December when the Federal Open Market Committee (FOMC) will meet and potentially raise interest rates for the first time in eight years.   Questions linger on the normalisation of treasury yields, but remain protected by the natural flow of US domestic pension plans, and foreign investors thirsty for positive real yields, acting as a shield to protect against any significant back up in yield. On the flip side, long-term US breakeven inflation remains low in this lower for longer environment. So what would an interest rate hike actually mean for investors? His...