A Fed official expects the U.S. central bank to implement one more 25-basis-point interest rate hike in May before stepping back and seeing how it impacts the economy. Appearing on CNBC’s Squawk on the Street, Atlanta Federal Reserve President Raphael Bostic said he anticipates “one [more rate hike] for sure” from the Fed, followed by a hold at that level “for quite some time.”
“If the data come in as I expect, we will be able to hold there for quite some time,” Bostic said. “Once we get to that point, I don’t have us really doing anything but monitoring the economy for the rest of this year and into 2024.”
He noted, however, that while the economy “is performing quite strongly… inflation remains too high,” adding that the current level of inflation is still “more than double” the Fed’s target of 2%.
“So, there’s more work to be done and I’m ready to do it,” Bostic said.
Recently released FOMC meeting minutes revealed that FOMC staff expect the U.S. economy to fall into a “mild recession” later this year.
So, while we wait for the Fed to make its next move with interest rates, many investors can expect continued market volatility, if not a possible economic downturn later in the year. For investors looking to gain alpha in such an environment, active management may help.
See more: Economy Slows Amid Fed Rate Hikes
Active management has the ability to pivot to where the alpha is when things go sideways. Plus, active managers with greater resources and greater scope benefit from economies of scale, which can often translate to better returns.
“Active managers have the flexibility to take advantage of market volatility and add to favored positions when prices become more attractive,” said VettaFi’s head of research Todd Rosenbluth.
As part of its lineup of active ETFs, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP ), the T. Rowe Price Dividend Growth ETF (TDVG ), the T. Rowe Price Equity Income ETF (TEQI ), the T. Rowe Price Growth Stock ETF (TGRW ), and the T. Rowe Price US Equity Research ETF (TSPA ).
T. Rowe Price has been in the investing business for over 80 years and conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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