There is no shortage of higher-yielding options if investors are prepared to recalibrate their risk and liquidity requirements
RISK-AVERSE investors may well be able to keep having their cake and eating it.
The US Federal Reserve’s guidance for interest rates in its latest meeting last week dampened expectations for rate cuts in 2025. Fed chairman Jerome Powell indicated two cuts in 2025 or a total of 50 basis points, compared to earlier expectations of 100 basis points.
Markets, however, may be pricing in only one rate cut in 2025, or even none. Morningstar said the market is incorporating a 60 per cent probability of the fed funds target range being at 4.25 to 4.5 per cent or higher by end-2025, “meaning no net rate cuts in 2025”.
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