By Luke Bartholomew, Investment Manager, Fixed Income – EMEA, Aberdeen Asset Management
It was only a matter of weeks ago that a September interest rate rise from the US Federal Reserve (Fed) seemed more than likely. The balance of probability has now shifted to the Fed pushing back the decision yet again. In recent weeks the US stock market has sold off, corporate borrowing costs have increased and the dollar remains strong. All of this amounts to a tightening in financial conditions that will have a similar effect on the economy to raising interest rates.