Interest Rates and Equity Markets to Rise in 2015

While monetary policy will remain loose globally, the path to normalisation in 2015 will begin in earnest with an interest rate rise in the US, likely mid next year, followed by the UK

J.P. Morgan Asset Management 1 December, 2014 | 11:30AM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, JP Morgan Asset management market strategists Stephanie Flanders, David Stubbs and Kerry Craig give their outlook for 2015. 

Both the US Federal Reserve and the Bank of England will likely raise rates in 2015 as their recoveries mature, whilst feeble growth and the risk of deflation will continue to threaten Japan and Europe. We see this in the chart below which shows different market expectations for target rate policy rates. There are both risks and advantages to this divergence but, for investors, it will have three implications: a stronger US dollar, continued weakness in global commodity prices and looser monetary conditions globally than previously expected.

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About Author

J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.

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