Having kicked off the tightening cycle with a toe-in-the-water quarter point interest rate hike in March, the US central bank will get into its stride on Wednesday with an expected 0.5% rise to a 0.75-1.0% range.
On both sides of the pond, stagflation is the fear but here it’s the ‘stag’ rather than the ‘flation’ that’s worrying investors.
At that level, fixed income markets have already priced in most of the expected rise in rates so bond investors are asking whether this might be a good time to top up.
The pound is languishing near recent lows at $1.25 while the euro and yen are at multi-year lows of $1.05 and 130 yen to the dollar respectively.
The shares most exposed to higher interest rates – growth stocks like those in the technology sector – are on the back foot.
If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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