4th February 2019

Markets rally as FED pauses rate hikes

This week the most impactful story came out of the US, when the Federal Reserve announced it was keeping interest rates steady. This is significant, because while official guidance is for three rate hikes in 2019, many believe the Fed is overly optimistic in its estimate of the strength of the US economy and needs to back off. The market was convinced this move was coming; now it’s arrived a significant risk of disappointment has been removed. The impact is yet to be determined, monetary policy takes about 18 months to have an impact on the real economy.

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