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Fed’s expected rate policy through to 2016: ‘One and done’

Mark Matthews of Julius Baer says that contrary to some expectations that the Fed rate hike would cause volatility in markets, they would actually like the rate hike to happen.

The Federal Reserve will in all likelihood hike interest rates today, for the first time in nine years, says Mark Matthews of Julius Baer & Co. There he agrees with what the rest of street expects. Where he differs is the course of the monetary policy he sees from hereon to end of 2016.

“Next year, most people believe the Fed will hike another two to four times. We think it’s a ‘one and done’,” Matthews told CNBC-TV18.

He added that contrary to some expectations that the Fed rate hike would cause volatility in markets, they would actually like the rate hike to happen.

“When the Fed raises rates, usually the US dollar goes down. The dollar usually goes up in advance of the hike,” he said. “This time will be the same. And it will be positive for emerging markets.”

Interview transcript to follow.

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