The money flow from US bonds into equities to continue for some more time, says Nick Parsons, Head of Research, UK & Europe, National Australia Bank.
Ahead of The Federal Open Market Committee (FOMC), the bulls seem to be in control in the US markets with the Dow Jones just 100-points away from 20,000 mark.
According to a CNBC-survey, 96 percent of the respondents expect the Fed to hike rates by 25 basis points.
Nick Parsons, Head of Research, UK & Europe, National Australia Bank said the attention may switch from the rate hike decision to the clues that one may be able discern in the top points and the new economic forecasts by Fed.
If the forecast shows Fed is on target to meet its 2 percent inflation goal in next 12-months, then the market is sure to price-in further interest rate hikes in 2017, says Parsons.
However, if the dot points show that the members are looking at three rate hikes next year then it could be the test of the equity rally and whether or not it could withstand that degree of tightening, says Parsons.
The money flow from US bonds into equities to continue for some more time, says Parsons.
For more, watch video