Fed Bigger Risk to Markets than China in 2018

The stock market rally will continue in 2018, says Vanguard - as long as the Federal Reserve doesn't wrongfoot the market

Emma Wall 11 January, 2018 | 8:36AM
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China is a growth area not a risk says Vanguard

Worried about Chinese debt derailing the bull market? You shouldn’t be, according to Vanguard. Instead, the key to determining when the correction will come is the labour market. Vanguard’s chief economist for Asia-Pacific, Dr Qian Wang this week said that investors looking to time their exit from toppy stock markets should watch the unemployment figure.

“We are near or at record lows of unemployment in the US, Japan and the UK. If this falls further we will see wages rise as the jobs market reaches capacity, which in turn will mean an inflation spike and the Federal Reserve will be forced to hike interest rates,” she said.

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Emma Wall  is former Senior International Editor for Morningstar

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