Nomura AM's Hodges: Fed could be forced into further QE in 2016

Rate hikes are off the table until 2017

The Federal Reserve could be forced to unleash further quantitative easing next year as global growth weakens and inflationary pressures fail to materialise, according to Nomura Asset Management's Dickie Hodges.

The bond manager (pictured) is so concerned about slowing economic growth he has raised cash to 25% on his $100m Global Dynamic Bond fund, and said he could increase this up to 35%. "Up until a month ago we were questioning when rates will go up. Now, we are questioning whether rates are going up at all," he said. "Recent economic data released in the US suggests things are not running at a level of growth that would lead to sustainable and ongoing rises in interest rates. Bond managers face duration conundrum as rate hike timings pushed out "The end demand for increased leverage...