Press comment: Fed must focus on real economy
If you are covering the US Federal Reserve Open Market Committee meeting which concludes today, please see the following commentary from Quilter Investors portfolio manager, Hinesh Patel:
“The Fed is expected to keep rates on hold and potentially signal a decreased likelihood of future hikes, maintaining a relatively loose policy stance. While that is logical based on the short term outlook, the Committee should be wary of painting itself into a corner by responding to today’s market sentiment rather than focussing on the direction of travel in the real economy.
“While markets are in relatively sprightly mood right now, that doesn’t necessarily reflect core strength in the economy. In the past we’ve seen situations where the Federal Reserve has arguably delayed necessary rate hikes for too long when the economic indicators are pointing toward tightening but investment markets are benign.
“Although loose monetary policy means markets can continue to feed on the sugar high of cheap money right now, tightening further down the line could trigger bouts of volatility.
“Another thing to look out for is whether the Fed provides any clarity on its expectations of a recessionary environment over the next 12-18 months. There will be pressure on the Fed to react in the event a recession were to come through, so a key indicator of their future intentions centres around just how they asses the probability of recession on the horizon.”
Notes to Editors:
Quilter Investors is part of Quilter plc. It provides multi-asset investment solutions designed for advised clients in the UK and internationally and manages £17.8bn on behalf of its investors (as at 31 December 2018).
Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
Quilter plc oversees £109.3 billion in customer investments (as at 31 December 2018).
It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.
The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.
Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.
Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.
The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:
• The Multi-asset business is now Quilter Investors
• Intrinsic to Quilter Financial Planning
• The private client advisers business is now Quilter Private Client Advisers
• The UK Platform to Quilter Wealth Solutions
• The International business to Quilter International
• The Heritage life assurance business to Quilter Life Assurance
• Quilter Cheviot will retain its name
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