After months of speculation the US Federal Reserve (Fed) finally looks set to increase interest rates for the first time in nearly 10 years. A bumper US non-farm payrolls (NFP) release (4 Dec) only increasing the chances of a rate hike at the Fed’s next meeting (16 Dec).

The growing expectation of an increase in rates is reflected in a spike in the three month US Treasury yield since the autumn.

In the words of David Lamb, head of dealing at forex specialist FEXCO, the Fed is playing ‘Russian roulette with a bullet in every chamber’. London Capital Group analyst Brenda Kelly says the non-farm data increased the probability of a hike from 74% to 78%.

Counter intuitive moves in the dollar which fell post the NFP print - and gold which rose - might reflect the closing out of long standing speculative positions now there is greater certainty over the move.

There is likely to be an increased divergence between US equities winners and losers as the ‘easy money’ which fuelled widespread strength across the board is withdrawn. Anyone interested in investing in individual US stocks could consider Visa (V.:NYSE). The payment processing firm is so central to modern life that you hardly even notice it and thus has relatively limited exposure to macro concerns.

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For investors unwilling to take on the various complications of investing overseas JPMorgan US Equity Income (GB00B3FJQ045) looks an interesting option. It has a particular bias towards America’s regional banking sector which can benefit from rate hikes as it earns more from the customers’ cash it has on deposit.

Commodities typically perform strongly when US rates are rising but shareholders in resource stocks looking for some relief should note that pattern may not be repeated. UBS analyst Daniel Morgan comments: ‘The looming rates lift-off may be different to other cycles because 1) the US is no longer the dominant commodity demand driving economy (now China) & 2) the US may this time be alone in tightening monetary policy (so the US dollar may continue to perform).’

It is worth noting that the Fed will be pacing itself. Rates have averaged 5.95% since 1971 and are likely to remain a long way south of these levels for some time.

US stockbroker Charles Schwab has discovered that 12 months after a slow cycle began (defined as when the Fed doesn’t hike at every consecutive meeting) the US market has been up 10.8% on average. Stocks were down 2.7% one year after fast cycles began, it adds.

JPMorgan US Equity Income can be a beneficiary if the Fed takes action.