9 May 2014

the US economy, the Fed and interest rates

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outlook

With the US economy on the mend, the focus will likely soon shift to when the Fed will start to raise interest rates. This could cause some volatility in shares.

  •    However, a Fed rate hike is probably still a year away at this stage and history tells us that it’s only when rates reach onerous levels that they become a real threat to share markets and ultimately economic growth.
  •    Steady progress towards eventual rate hikes in the US will further relieve pressure on the $A over time.

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The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.

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