Experts believe investments in national companies will become the catalyst for US economic growth. However, analysts are now focusing on the real economy, a part of a country’s economy that produces goods and services.

Stock market experts recommend investors monitor both the Fed’s key rate decisions and the development of the US economy. Currency strategists advise traders to buy shares of the companies whose management could pay dividends even during a recession. 

Analysts assume market makers should focus on so-called safe sectors of the US economy, mainly on stocks of retail companies in the FMCG, housing, and utilities sectors. These sectors account for the real economy, in which cash flows are generated and dividends are paid even during an economic downturn.

According to preliminary estimates, the Fed will have to increase its key rate significantly in the near future due to a high risk of a recession in the US economy. Therefore, it is advisable to apply a conservative strategy and invest in the real economy.

Notably, the Fed raised the interest rate by 75 basis points to 2.25-2.5% year-on-year at the end of July. The previous hike occurred in mid-June 2022 when the key rate was increased to 1.5-1.75% in annual terms. In May, the regulator also raised the interest rate to 0,75-1% year-on-year. The Fed decided to increase it by 50 basis points for the first time since May 2000.

These measures were designed to curb inflation that hit record highs over the past 40 years. For this reason, the watchdog is likely to stick to aggressive monetary tightening.