60 seconds with Marcus Brookes on the potential for a December rate rise

Marcus Brookes discusses why he believes the US economy is in good health and a Christmas interest rate rise could be on the cards.


Marcus Brookes

Marcus Brookes

Head of Multi-Manager

Is the Fed eyeing a December rate rise?

In September 2015 the Federal Reserve (Fed) took the important decision not to raise interest rates.

But investors had prepared themselves for the rate rise in almost a decade; they thought that if the economy was performing well then interest rates should rise to 0.5% from the 0.25% emergency rate.

What actually happened was the Fed chose not to raise interest rates because of external influences.

Slowing growth in China was one factor that the Fed pointed to in delaying a hike in rates. That introduced a new element of risk, which saw stockmarkets fall, initially at least.

Now, following a period of weakness, markets have started to recover as investors have become more sanguine about the outlook for China.

This is another step towards normalisation of monetary policy. We are fairly sure that the US economy is fine and that would suggest we could get a US interest rate rise in December.

For related content:

Failure to launch: Fed aborts lift off

How would interest rises impact my investments?

Life after QE - what's next for markets?

Important information

This communication is marketing material. The views and opinions contained herein are those of the named author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds.

This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy.

The data has been sourced by Schroders and should be independently verified before further publication or use. No responsibility can be accepted for error of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions.

Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.  Exchange rate changes may cause the value of any overseas investments to rise or fall.

Any sectors, securities, regions or countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. Forecasts and assumptions may be affected by external economic or other factors.

Issued by Schroder Unit Trusts Limited, 31 Gresham Street, London, EC2V 7QA. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority.