Why is a US interest rate rise such a big deal?

  • Interest rates (a key tool of monetary policy) are a fundamental driver of where the global savings that swish around the planet are parked.
  • Industrial world interest rates have been zero or close to zero for a while now - the US will be the first to raise rates.
  • So already have seen a global move towards buying US$ assets, hence US$ stronger - a rate rise will reinforce this trend.

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