"Investing in fixed income today is almost the opposite of what it was one year ago," says BlackRock's Rick Rieder, believing those sectors which performed poorly last year will do well in 2014. As such, he sees the best value in long-dated munis and long-dated TIPs, and wants to avoid the belly of the curve - 3 to 7 years.
He gives Janet Yellen good grades for her performance yesterday, saying she's merely acting appropriately to changing economic conditions. The "dots" are "a survey, not policy," says Rieder, but nevertheless, the markets quickly priced to them.
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