Retirement
US bullish post-Trump, rate hike imminent
The knee jerk sell-off following news of Donald Trump’s presidential win seems to have faded, with markets factoring in a US rate hike next month with near certainty.
US bullish post-Trump, rate hike imminent
The knee jerk sell-off following news of Donald Trump’s presidential win seems to have faded, with markets factoring in a US rate hike next month with near certainty.
After a couple of weeks, some of the impact of a Trump presidency is now apparent, says investment firm Instreet.
“Sectors such as construction and banks have done particularly well as investors expect the new president to deliver a surge in infrastructure spending and a lighter regulatory touch,” Instreet managing director George Lucas said.
“The possible economic leg-up that the market believes Trump’s policies will deliver has also put a spark under the US dollar. In turn, investors have fled government bonds on expectations the US Federal Reserve may need to raise interest rates faster than expected to contain inflation.”
The short-term outlook appears largely positive, as US bonds rally to their highest point in a year.
“Ten-year US Treasury yields are at a 12-month high after climbing around 40 basis points since the election,” MR Lucas said.
This market reaction now means a December rate hike looks likely.
“Chair of the Federal Reserve Janet Yellen backed this up last week when she said an increase in short-term interest rates could ‘become appropriate relatively soon’,” Mr Lucas said.
“We believe solid US data is also supporting the case for tighter monetary policy. Markets are now expecting a rate rise in December, with the federal futures market implying a 95 per cent probability of a 25 basis points hike at the FOMC meeting on 14 December.”
HSBC chief economist Paul Bloxham said this is consistent with his view that the Fed is on a slow path of rate hikes over the next couple of years.
“We’re of the view that the Fed is on a hiking path but it’s a very, very mild one. The Fed will lift rates in December this year, December next year and again at the end of 2018,” Mr Bloxham said.
“We think rates are going to go higher but we think it’s going to be a very slow path to higher rates.”
RELATED ARTICLES
Retirement Planning
New Framework Aims to Bridge Australia’s Financial Advice Gap
A ground-breaking framework introduced by the Actuaries Institute promises to revolutionise how Australians access financial support, potentially transforming the financial wellbeing of millionsRead more
Retirement Planning
The downsizer dividend: how Australia’s ageing shift will reshape property, finance and AI strategy
Downsizing is moving from a personal milestone to a system-level lever for Australia’s housing market. As policymakers court reforms and agents eye fresh listings, the real profit pools will accrue to ...Read more
Retirement Planning
Half of Australians financially insecure about retirement as AMP launches new initiative
In a significant move aimed at addressing the retirement concerns of Australians, AMP has unveiled the Retirement Confidence Pulse, a national barometer designed to gauge the financial confidence of ...Read more
Retirement Planning
North introduces Grow to expand Australia's financial advice footprint
In a bid to bridge the gap between the demand for financial advice and its accessibility, North, a prominent platform for superannuation and retirement in Australia, has launched an innovative ...Read more
Retirement Planning
Majority of Australians anxious about retirement as super knowledge gaps persist, report finds
A new study by Aware Super has revealed that a significant majority of Australians aged 45 and over are feeling anxious about retirement, with nearly nine in ten respondents concerned they will run ...Read more
Retirement Planning
AMP’s MyNorth Lifetime boosts financial security and retirement income
AMP has reported that its MyNorth Lifetime retirement income solution is delivering significant financial benefits to retirees, with an average uplift of 50% in total income. Read more
Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more
Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more
Retirement Planning
New Framework Aims to Bridge Australia’s Financial Advice Gap
A ground-breaking framework introduced by the Actuaries Institute promises to revolutionise how Australians access financial support, potentially transforming the financial wellbeing of millionsRead more
Retirement Planning
The downsizer dividend: how Australia’s ageing shift will reshape property, finance and AI strategy
Downsizing is moving from a personal milestone to a system-level lever for Australia’s housing market. As policymakers court reforms and agents eye fresh listings, the real profit pools will accrue to ...Read more
Retirement Planning
Half of Australians financially insecure about retirement as AMP launches new initiative
In a significant move aimed at addressing the retirement concerns of Australians, AMP has unveiled the Retirement Confidence Pulse, a national barometer designed to gauge the financial confidence of ...Read more
Retirement Planning
North introduces Grow to expand Australia's financial advice footprint
In a bid to bridge the gap between the demand for financial advice and its accessibility, North, a prominent platform for superannuation and retirement in Australia, has launched an innovative ...Read more
Retirement Planning
Majority of Australians anxious about retirement as super knowledge gaps persist, report finds
A new study by Aware Super has revealed that a significant majority of Australians aged 45 and over are feeling anxious about retirement, with nearly nine in ten respondents concerned they will run ...Read more
Retirement Planning
AMP’s MyNorth Lifetime boosts financial security and retirement income
AMP has reported that its MyNorth Lifetime retirement income solution is delivering significant financial benefits to retirees, with an average uplift of 50% in total income. Read more
Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more
Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more
