In Focus: Fixed income  

US soft landing 'almost out of question' after 0.75pp rate hike

"The long-awaited central bank 'pivot' now seems further away - until we see strong hard data evidence of monetary policy tightening transmitting to the real economy, the Fed will continue on its hiking path."

Stupnytska said Fidelity's multi asset team remained cautious on risk assets, maintaining equities and credit underweight and a strong overweight to cash.

"The team remains neutral on duration amid continued central bank focus on inflation, while keeping an eye on the deteriorating growth outlook," she said.

"In credit, we are defensively positioned in higher quality developed markets relative to emerging markets, where we see headwinds from dollar strength."

But Richard Carter, head of fixed interest research at Quilter Cheviot, pointed to longer-term opportunities.

“While this rate hike will come as a surprise to few it will still send jitters through the market and stoke investor fears that a recession is on the horizon.

"However, the US remains resilient and while its markets still show volatility there may be some opportunities in the longer term once inflation is tamed."

carmen.reichman@ft.com