Federal Reserve tightening expected to be shallow

THE US Federal Reserve is likely to raise interest rates for the first time in nine years at its next monetary decision-making meeting on Dec 15-16, but next year's tightening cycle is likely to be shallow. By December 2016 the Fed may have to start cutting rates again as the economic cycle weakens.

US rates have been near zero since December 2008. In view of expectations that a rate hike is close, the focus of financial markets has shifted towards p…