Investment Clock insights

Fed running out of time to shift expectations for a September rate hike


Ian Kernohan

2 September 2016

While the latest US labour market report was reasonably solid, and certainly did not give any indication of economic slowdown,  an even stronger report was needed to make a September Fed hike virtually certain.  
The Fed will not raise rates if markets aren’t expecting a move, so if they are intending to take action, they only have a few weeks left to shift expectations.
The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.

While the latest US labour market report was reasonably solid, and certainly did not give any indication of economic slowdown, an even stronger report was needed to make a September US Federal Reserve (Fed) rate hike virtually certain.

The Fed will not raise rates if markets aren’t expecting a move, so if they are intending to take action, they only have a few weeks left to shift expectations.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.