As the Federal Open Market Committee settles into another two day meeting, investors would be right to have low expectations on the level of clarity they will get as a result.
So, an ‘expedited’ Fed meeting was called on Monday (11th April) to discuss interest rates. Nothing unusual in that, if in isolation, but the meeting was followed immediately by a debrief to the President and Vice-President by Janet Yellen. Not common practice by anyone’s standards!
Canada Life Investments economist David Arnaud has examined the historical data to shed light on whether suspicions the Federal Reserve takes the election cycle into account are founded.
Janet Yellen’s Economic Club of New York speech provided a timely reminder that nobody can move markets like central bankers.
“If you buy investment grade debt, it looks like the Fed will be in your corner,” said David Buckle, head of quantitative research at Fidelity.
The US Federal Reserve will likely raise interest rates one or two times this year, according to Garth Taljard, the firm’s head of multi-asset products for Asia.
Those who believe that ‘risk-on, risk-off’ is consigned to the past look away now, with record inflows into US high-yield indicating that sentiment has shifted once again to the spicier end of the fixed income spectrum.
The United States accounts for around half of the global equities index so whether you like the asset class or not you can never ignore it, or eliminate it from a portfolio.
European stocks fell on Thursday morning following Federal Reserve chair Janet Yellen’s speech yesterday in which she said US financial conditions have “recently become less supportive of growth”.
$10 dollar oil is a possibility following 18 months of “outright victimisation” of the commodity and a bullying Fed, according to PSigma’s IM’s investment strategy head, Rory McPherson.
The ‘first rate rise since the financial crisis’ was a long time coming and markets initially responded relatively well, but it is starting to look like a miss-step by the Federal Reserve.
The Federal Reserve’s decision to hold interest rates on Wednesday night accompanied by dovish rhetoric suggested the first rise of 2016 will not come until the summer.
