A Fidelity economist has warned there are two big risks on the economic horizon, such as Greece and the Fed’s monetary policy.
Anna Stupnytska, global economist at Fidelity, said with continued uncertainty around the future of Greece and the risks around the Fed tightening monetary policy “this is unchartered territory on both fronts.”
She said there is “a lot of market volatility around that and I think that is probably something that we should expect through the summer, especially if the situation around Greece is not solved anytime soon”.
Speaking to Ellie Duncan, deputy features editor of Investment Adviser, Ms Stupnytska said advisers should expect “a bit of volatility” this summer but added “ultimately I think the fundamentals are looking quite positive.”
Ms Stupnytska said: “Growth should accelerate in the second half of this year.
“What we have learnt over the past year or so is monetary policies cannot diverge that much. If we think of a few months ago, or last year, the Federal Reserve was quite set on hiking rates in June 2015 and in June 2015 that is quite unlikely to happen.
“This timeline was pushed out mainly because we have seen a significant rally in the dollar that has put downward pressure on inflation and growth in the US. That has resulted in the timeline being pushed out even further.
“So, I don’t think monetary policy can diverge so much but I do expect a hike or two over the next few months or perhaps in 2016 from the Fed and at the same time they will potentially start tapering quantitative easing around September next year.
“There will be some divergence but nothing dramatic.”
emma.hughes@ft.com
