The Fed's biggest rate hike in 22 Years

As expected, the US Federal Reserve hiked interest rates by 50 basis points (bps) last week, lifting the target federal funds rate to a range of 0.75% to 1%. This is the first 50bps rise since early 2000.

Meanwhile the RBA decided to increase the cash rate target by 25bps to 35bps, the first time the RBA has hiked rates in almost 12 years.

In the latest episode of the Invest it Best podcast, I speak with Wilsons Head of Investment Strategy, David Cassidy to discuss the major components within the markets wall of worry.

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Discussion topics

1:31 - US Inflation

  • Non core energy price inflation
  • Core goods price inflation: manufactured good we consume
  • Central banks dual mandate to control inflation

6:46 – US Wage growth

  • The employment cost index

8:26 - Inflation in Australia

  • The last time we had inflation this high
  • Australia likely lagging the US

13:03 - RBA guidance not playing out

  • Why they have been wide of the mark in their view

14:57 – Australian Election

  • Increasing rates during an election campaign

16:00 Putting it all together

  • What does this all mean for the market?

18:25 A stock that has caught David’s attention

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1 contributor mentioned

Ted Richards
Private Wealth Advisory
WILSONS

Ted Richards has twice been a Finalist at the Australian Podcast Awards (in the category of ‘Best Business Podcast’) and is a former professional Australian rules footballer who played for the Essendon Football Club and the Sydney Swans in the AFL...

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