Fed increase 'would alarm'
Sharemarkets, including in New Zealand, had a volatile start to the week last week as it became obvious this week’s meeting is a “live” one – with the possibility of an interest rate rise on the table, albeit rated less likely than a December move.
Fergus McDonald, head of bonds and currency at Nikko, said the fact the market was expecting the move later in the year would mean any immediate change would have more of an impact and a move this week could cause alarm.
“If they do move, markets will be a lot more unsettled and we might see that reverberate around equities markets and the like.”
It would pull up long-term interest rates for New Zealand, too, he said.
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