By Shane Oliver, Head of Investment Strategy & Chief Economist from Oliver’s Insights, AMP Capital, Edition 40 2015
Key points:
- Worries about the Fed’s first interest rate hike, which is now likely to be in December, may cause more volatility in share markets in the near term.
- However, there are several reasons not to be too concerned about the Fed: rate hikes will be conditional on the US economy continuing to improve and the
process is likely to be gradual; history tells us it is only when monetary policy becomes tight that it becomes a major problem; other major countries are still easing; the strength of the $US will constrain the Fed; and shares outside the US are cheap indicating there are still plenty of opportunities for investors.