September Fed rate hike could derail equity rally

A sharper than expected rise in US interest rates has the potential to derail global equity markets with Australian bank stocks potentially vulnerable.

That’s the message of caution from Ellerston Capital’s new global macro trading duo of Brett Gillespie and Tim Toohey. They’re sticking to their view that the market has underestimated the urgency of the Federal Reserve to “normalise” US interest rates.

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