Investment Clock insights

US Federal Reserve minutes open up June


Ian Kernohan

19 May 2016

The Fed have succeeded in shifting overly dovish market expectations, in order to keep open next month’s Federal Open Market Committee (FOMC) meeting.  There are a range of views in the Committee however, so a June hike is not yet nailed on. The minutes mention the Brexit referendum & China as potential risk factors:

“Some participants noted that global financial markets could be sensitive to the upcoming British referendum on membership in the European Union or to unanticipated developments associated with China’s management of its exchange rate.” 

My base case remains that the Fed will hike twice this year, and we remain dollar bulls as a consequence.

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.