Outlook Strategies

Another US rate hike looms

by Big River Capital|Published May 4, 2016

The April minutes from the US Federal Reserve suggest that the FOMC is charting a course toward September for the next interest rate increase in our opinion.

While the committee left the door open to an increase in June, the modest language change indicates September is the most probable increase date given the current economic data in our view.

We are optimistic with regards to prospects for the US and global economies for the balance of the year.

Fed-rate-hikes

Fed Action

If the data continues to strengthen as anticipated, Federal Reserve will likely move ahead with 25 basis points in September and then hold to monitor the effects of the rate increase on the US and global economies.

This scenario makes an additional hike possible during December, but it is more likely that subsequent increases will not occur until 2017.

Against the backdrop of a strengthening US and global economy with limited interest rate pressure, Big River Capital’s view is constructive on stock prices for the remainder of 2016.

Our opinion, of course, is always subject to change. To quote economist John Maynard Keynes: “When the facts change, I change my mind. What do you do, sir?”.

Photo Credit: Day Donaldson via Flickr Creative Commons

AUTHOR

Big River Capital

Prior to launching Big River Capital Corporation in 2012, Bill Robertson founded Robertson Financial Services LLC, a hedge fund consulting and marketing business in 2001. During the first five years in operation, Robertson Financial raised nearly $200 million of assets allocated to hedge funds. Bill was registered with the Financial Industry Regulatory Authority (FINRA) and held his Series 7, Series 24, Series 27 and Series 66 licenses. Bill Robertson is part of a multi-generational family business with roots in agriculture and banking. Bill worked summer jobs on the family farm in Mississippi and used his paycheck to buy his first shares of stock in 1983. Robertson began trading a personal equities account fulltime in 1998 and used trading profits to make his first real estate investment in an office building. The building was sold for a profit in 2003. In 2005, he established Robertson Development of MS, LLC and built a shopping center, which was sold for a profit in 2014. In 2009 Bill established Big River Real-Estate Partners Fund, LP which began acquiring Florida tax liens and then purchased and renovated residential rental houses during the Great Recession. Earlier in his career, Bill worked on the floor of the Chicago Board of Trade and was a member of the CBOT. Bill earned an MBA from DePaul University. He obtained a Bachelor of Business Administration from Mississippi State University, where he was inducted into Phi Eta Sigma honor society, received the Bing Scholarship and was presented with a Certificate of Award for Academic Achievement from Sigma Alpha Epsilon. Bill is a member of the Rotary Club and Christ United Methodist Church. He is an Eagle Scout, marathon runner and licensed pilot. He has a passion for the markets, sports and the outdoors.