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U.S. rate hike not expected to jolt markets

Standard Chartered notes as follows on Tuesday Most investors expect US rates to inch higher over the course of the year and agree with our bear-flattening view on US Treasury (UST) yields. They are largely indifferent o…

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Standard Chartered notes as follows on Tuesday

  • Most investors expect US rates to inch higher over the course of the year and agree with our bear-flattening view on US Treasury (UST) yields. They are largely indifferent on whether the first Fed hike happens in June or September. 

  • While these investors expect a re-pricing of risk assets, they think it will be orderly given that the Fed hike has been well flagged, unlike the 'taper tantrum' of May 2013. 

  • A handful of investors believe the Fed will not raise rates this year, as it cannot afford to do sowithout jeopardising the US recovery. 

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