Markets Are Too Sanguine on Fed Hikes, $70 Billion Fund Says
- Newton Investment sees dollar strong as Fed keeps tightening
- Fund manager says EM rout likely still in ‘early stages’
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Financial markets are underestimating the extent to which the U.S. Federal Reserve will keep lifting interest rates, according to Newton Investment Management.
“In the medium-term view, the markets are a little bit sanguine about the potential risks associated with interest-rate increases -- because borrowing costs have been very, very, very low for corporates for a long time,” said Curt Custard, chief investment officer at Newton, a London-based subsidiary of Bank of New York Mellon Corp. “You’re probably going to see more rate hikes than currently discounted.”