In the latest edition of Oliver’s Insights released today, Dr Shane Oliver looks at the decision by the US Federal Reserve to finally raise interest rates.
Key points are as follows:

  • After much delay and much warning the Fed has finally raised the Fed Funds rate from a range of 0-0.25% to 0.25-0.5%. The move signals confidence in the ongoing recovery in the US economy after the GFC.
  • Given ongoing deflationary risks and slow global growth future Fed hikes are likely to be cautious and gradual.
  • With the Fed decision out of the way, global shares are likely to resume their rising trend but with US shares as a relative underperformer.
  • Bond yields are likely to remain low which should be positive for real assets.
  • Rising US interest rates will help maintain downwards pressure on the value of the $A through 2016

To read the article in full – CLICK HERE