Fund managers expect Fed interest rate hike by September
In its latest monthly global fund manager survey — published just ahead of last night’s close of the Fed’s two-day policy meeting and chair, Janet Yellen’s latest rates message — Bank of America Merrill Lynch said that 54% of investors see September being the month in which the Fed kick-starts a rise in global interest rates.Ms Yellen was expected to hold off on raising rates, ahead of this week’s meeting, although she did signal earlier this year that US market conditions had improved enough to warrant an increase in 2015. The Fed sees US employment levels (currently at 5.5%) as being sustainable over the long-term to allow for more inflationary pressure; although the IMF has said it would rather a move was put off until early next year.
According to Bank of America, fund managers’ portfolios saw cash levels rise from 4.5% in May to 4.9% this month, with the proportion of investors’ portfolios overweight on equities falling from 47% to 38%.
