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The fed in terms of inflation would not help investors

Traders in the debt market have already begun to doubt the pace of the fed’s tightening in the coming year

The Federal reserve will not be able to help stock market investors, given the likelihood of sustained inflationary pressure. Including for this reason that Morgan Stanley does not offer investors to buy US shares, despite the fact that their comparative value was the lowest from February 2016 after the fall of the S&P 500 index by about 9% since the beginning of the month. It is reported Bloomberg.

The shares of oil companies ahead of the rest of the market, and the shares show EAT better than US equities. US stocks, corporate bonds and dollar index “behave significantly worse” when the acceleration of inflation combined with slower growth than when both measures are accelerated.

Traders in the debt market have already begun to doubt the pace of the fed’s tightening in the coming year. But given that the acceleration of inflation will probably force the US Central Bank to continue raising rates, short Treasury securities will be “more difficult than it would be otherwise,” wrote strategists at Morgan Stanley.

Investors ponderosas in dollars, can consider short-term zahedzhirovat contracts on interest rates in countries with less inflationary pressure, such as Japan and South Korea.

  • Following the meeting of 25-26 September, the fed made the decision on the third in 2018 the increase to your interest rate, this time by 0.25% — up to 2-2. 25% per annum. The head of the regulator Powell assured that the decision of his Department not talking about changing the vector of monetary policy.
  • High interest rates on dollar should result in the increase in yields on Treasury bills of the United States, and to support the policy of absorption of the dollar. Investors will more actively withdraw capital from developing countries (and Ukraine in particular), and to invest in America’s debt.
  • Real tightening of monetary policy at the fed promise in 2019-2020 is noted in the minutes of the meeting of the regulator. Next year there is forecast a rate increase to 3.13% and 2020-th — even to 3.4%. It should meet the objectives of the “sustainable expansion of economic activity”, according to U.S. officials.

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