Five key questions to ask following the US Fed rate hike
17 Mar 17
The third 0.25% interest rate hike of this upcycle from the US Federal Reserve begs five questions, all of which have implications for the US, the globe and portfolios.
Dollar weakness has led to higher metal and oil prices in the past, to the benedit of mining and oil stocks, but challenges will be thrown up by any Fed rate hike.
“While the past is by no means a guarantee for the future, this does make sense,” Mould said.
“With the exception of cocoa, commodities are priced in dollars, so a rising dollar makes it more expensive to buy them in local currency terms for non-dollar-pegged nations, potentially crimping demand.
“The falling dollar will have the opposite effect.
“Commodities are a big export for many emerging markets (though not all, with India a glaring exception) so raw materials price weakness could again be a burden for some, notably Brazil, South Africa and Russia.”
Tags: Federal Reserve | US
