21 September 2022
If you are covering the latest monetary policy announcement from the Federal Reserve, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Today’s interest rate hike marks another step in the Federal Reserve’s fight against inflation and we are likely to see more of these moves before the end of the year.
“This 75bps hike is the third in succession and continues the Fed’s aggressive tactics for trying to tame runaway inflation. These tactics are only likely to continue until inflation starts to bow to the pressure of increasing interest rates.
“Although there has been some weakening in the housing market and consumer confidence, the US jobs market remains extremely tight and inflation pressures have broadened out from areas like food and energy.
“The Fed remains committed to getting on top of the inflation threat even if it means causing a recession, so investors will be nervously hoping for signs over the next few months that price pressures are beginning to ease.
“While this rate hike will come as a surprise to few it will still send jitters through the market and stoke investor fears that a recession is on the horizon. However, the US remains resilient and while its markets still show volatility there may be some opportunities in the longer term once inflation is tamed.”
