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In addition, private payrolls grew stronger than expected in September with 230,000 positions added. The private payrolls total easily bested the 168,000 jobs added in August–more than the 185,000 expected by a survey of economists and the highest number of payrolls added since the 241,000 added in February.

Additionally, the U.S. services sector grew last month at its fastest pace based on data released by the Institute for Supply Management. The ISM non-manufacturing index ticked up to 61.6, which represents its highest level since 2008, beating out a poll of economists expecting the index to show 58 for the month of September.

With all the positive data, it would seem that a rate hike was substantiated and that more are to be expected through the end of 2018 and into 2019, but Elliott begs to differ.

“The risk to stock market investors comes not from a sharp bond market sell-off which raises the risk-free yields on Treasuries,” said Elliott. “It is from the Fed ignoring its chair’s own advice and tightening monetary policy faster than the American economy can stand.

“With three more interest rate hikes expected next year, which would take the Fed’s target range to 2.75 per cent – 3 per cent, there is a growing risk not of inflation derailing the U.S economy, but Fed policy error whereby growth is harmed because of an overly-aggressive policy mix. This would include not only raising interest rates too fast, but also its quantitative tightening program that is withdrawing $50bn a month from the U.S. economy, and so contributing to higher bond yields.”

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