Asset Allocation Strategy
Fed’s biggest rate increase in 22 Years
Mon 9th May, 2022

As expected, the US Federal Reserve hiked interest rates by 50 basis points (bps) last Wednesday, lifting the target federal funds rate to a range of 0.75% to 1%. This is the first 50bps rise since early 2000.

Meanwhile the RBA decided to increase the cash rate target by 25bps to 35bps, the first time the RBA has hiked rates in almost 12 years.

In this report we cover:

  • Chair Powell’s no more hawkish than expected: a relief to markets
  • The Fed is still a long way from Dovish
  • Whether “Peak Fed” suggests re-weighting into growth stocks
  • The RBA’s belatedly hawkish shift

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Written by

David Cassidy, Head of Investment Strategy

David is one of Australia’s leading investment strategists.

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