You are here: Home - Investing -

No US rate rise in 2015, argues Newton’s Pidcock

Written by:
Jason Pidcock, fund manager on the Newton Asian Income and Emerging Market Income funds, says that US interest rates are unlikely to rise by the end of 2015.
No US rate rise in 2015, argues Newton’s Pidcock

The manager (pictured), who runs around £5bn in the Asian Income fund alone, says that he believes the Federal Reserve are looking for reasons not to raise rates and lower inflation, weaker oil prices and geopolitical tension may provide the excuse they need.

He says: “Although unemployment is falling, the Federal Reserve will be reluctant to raise rates if inflation falls below 1 per cent. There has been a dramatic fall in energy prices and generally a rise in the dollar keeps the oil price low. Unemployment is not falling as fast as expected and the US economy has seen its best period.”

Interest rates are therefore likely to remain at their current low level, argues Pidcock, and further quantitative easing may be a possibility.

Pidcock says that global political events are also likely to keep the Federal Reserve cautious. He adds: “Russia is on the brink of an economic, political and territorial collapse. It has already burnt through around $100bn in reserves this year. It is experiencing a significant brain drain. It doesn’t have the economic size or population to maintain its borders.” He believes that ultimately Russia may be forced to sell land to the Chinese to shore up its finances, though this is unlikely to be during Putin’s tenure.

He believes a major risk for 2015 is that Russian policymakers take drastic measures out of desperation. This also makes a US rate rise unlikely.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week