Wainwright Marks Management - Fed Rate Hike Likely

Analysts at Wainwright Marks Management say it is widely anticipated that the US Federal Reserve will hike interest rates this week and financial markets are keen to see whether or not the improving US economy will prompt the Fed to tighten monetary policy.

The two day policy meeting, which will take place this week, could signal the end of a very accommodative rate policy the Fed has implemented in an attempt to bolster the US economy since the beginning of the financial crisis more than a decade ago.

The Fed's existing policy, which includes a staple element of loose monetary policy has been criticized for being out of date and Wainwright Marks Management analysts believe it will likely be updated in the coming months.

According to Wainwright Marks Management analysts there is a 95 percent probability that Federal Reserve policy makers will increase the benchmark interest rate at their meeting this week and an increase of a quarter of a percentage point is expected.

George Peterson, Director of Private Clients at Wainwright Marks Management says the more pressing question regarding this week's Federal Reserve policy meeting is whether or not the central bank will amend its monetary policy to accommodate better GDP expansion over the coming years.

"There is a chance that the still-present threat of a global trade war could cause the Fed to leave its current view regarding monetary policy and economic outlook unchanged," says Peterson.

According to recently released official data, US gross domestic product expanded at a yearly rate of 4.2 percent during the period from April to June this year, 2 percent higher than the 2.2 percent growth seen during the first quarter.