Asset managers predict 75 basis point Fed hike


Brian Nick, New York-based chief investment strategist at Nuveen, said the Fed would “find plenty of excuses” in the report to keep raising rates at a rapid pace. “A 75 basis point hike next week is assured,” he said. “The only question is whether there will be voices on the committee that want to raise more.”

Nuveen had approximately $1.1 trillion in assets under management as of June 30.

David Wagner, a Fairhope, Alabama-based equity analyst and portfolio manager at Aptus Capital Advisors, said a 75 basis point rate hike by the Fed at next week’s meeting is “no longer a certainty after today’s report.

“This report does not increase confidence that inflation is down,” he said. “This report is unlikely to depress Treasury yields over the longer term, which is absolutely crucial for equity markets to perform well in the near future, especially after the substantial rise in yields we have seen since early August. .”

Aptus has $3.6 billion in assets under management.

Brad Conger, West Conshohocken, Pa.-based deputy chief investment officer at Hirtle Callaghan & Co., said August’s CPI report “will have dashed any hope that we were on a downward path for inflation. “.

The inference for the market, he added, should be that inflation “is not going to fade smoothly.”

“Inflation is creeping into many spending categories at once, at low levels but persistently,” he added. “I think we may be learning that inflation is like a tsunami with multiple waves rather than a single rogue wave.”

Hirtle Callaghan has $20 billion in assets under management.

Johan Grahn, Minneapolis-based vice president and head of ETF strategy at Allianz Investment Management, also said a 75 basis point hike later this month is “more or less a sure thing.”

“With a 75 basis point hike and a continued hawkish tone from the Fed, equity markets will have to accept that economic growth will suffer and reassess accordingly,” Grahn added.

Allianz IM has $19.5 billion in assets under management.

Andrew Slimmon, Chicago-based managing director and senior U.S. equity portfolio manager at Morgan Stanley Investment Management, said the CPI report was a “not-so-subtle reminder that inflation is more rigid than what optimists had hoped”.


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