Equity Strategy
Rates on the Move
Wed 11th May, 2022

Last week the RBA hiked rates for the first time in 12 years, raising the cash rate from an all-time low of 0.1% to 0.35%. Several more rate hikes are likely in the next 12 months.

Currently, we believe that RBA rate hikes will not be a significant headwind for equities. However, a rate hike environment would likely result in prolonged volatility until the market gets more clarity about the end game.

Rate hikes will benefit certain sectors and not others:

  • Retail – a tough period ahead for some
  • Housing sector - at risk
  • Corporate debt – Levels acceptable
  • Banks and insurance – beneficiaries of rising rates

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    Written by

    David Cassidy, Head of Investment Strategy

    David is one of Australia’s leading investment strategists.

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