By Douglas R Terry, CFA
The Fed has weighed in with their opinion of the economy. Given their economic assessment, they have presented their opinion of the appropriate level for interest rates. Interestingly, investors don't seem to be of the same opinion as the committee on the appropriate level for rates or the timing of upcoming interest rate moves. Perhaps they view the economy as weaker than the Fed. Perhaps some large investors have no choice and are buyers of these securities regardless of price. Whatever the reason, the disconnect and its implication should be noted when making investment decisions.
INTEREST RATES TODAY AND FED PROJECTIONS
EQUITIES SHOULD CONTINUE TO OUTPERFORM BONDS
BUT BEWARE OF VOLATILITY AND TURBULENCE
FED HIKES HAVE RESTRAINED STOCKS IN THE PAST