Get Ready for Rising Rates
Sep 18, 2019 | Viewpoints
The possibility of sustained economic growth, improvements in consumer confidence and job creation, as well as an increased willingness by the Fed to entertain a tighter monetary policy are factors signaling to investors that the bond markets may be entering a period of rising interest rates. This represents a secular paradigm shift for short-duration fixed- income investors that have seen rates fall and stay at record lows for nearly a decade. As with any turning point, this potential change will create a number of opportunities to enhance earnings. Likewise, this rise in interest rates may bring risks that short-duration investors must be prepared to navigate in order to ensure the safety, liquidity, and return of their investments.