Vassili Panoussis

The fourth quarter was marked with high levels of volatility as investors aggressively changed their expectations for interest rate cuts by the Federal Reserve. Probabilities of a rate cut in December fluctuated from a high of 100% to a low of 30% with the Fed ultimately deciding to cut interest rates by 25bps on the 10 December.

Despite the Fed changing its tone to a hawkish one yet again, citing only one rate cut next year, its announced commitment to purchasing US Treasuries over the next few months is particularly bullish given the quantitative easing effects that are expected to follow. As a result, we remain bullish on equities particularly in emerging markets which continue to trade at lower multiples. Furthermore, we believe the rally in precious metals is far from over as we expect several nations to continue shifting their Treasury reserves away from US Treasuries to commodities. 

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