The FOMC released its notes from the June 13th through June 14th meeting. Fixed income investors have had an interesting year, as rate hikes have put the income back in “fixed income.” Still, this high-rate environment remains complex and challenging. The minutes from FOMC meetings can sometimes leave behind clues. These clues are essential for investors hoping to read the tea leaves.
The CME’s FedWatch tool puts the likelihood of another hike in July at 89%. With zero interest rates in the past few years, the markets have had a challenging first half of the year. Despite these challenges, US stocks ended up in the green.
The FOMC Low Down -- Will the Rate Hikes Continue?
VettaFi head of research Todd Rosenbluth said, “while the Fed paused its rate hiking program at the last meeting, some advisors think more is coming in the second half. There’s a lot of uncertainty in how to position client portfolios for the next six months. The good thing is that there are lot of tools for advisors to use to either protect against rising rates or to seek out income to support client objectives."
Despite the pause last month, inflation remains persistent, and Fed Chair Jerome Powell continues to target 2%, which could take some time. At an ECB forum on Central Banking, Powell stated, “I don’t see us getting back to 2% this year or next year.” The core personal-consumption expenditures price index rose 4.6% in May, which was less than expected.
The Fixed Income Symposium
VettaFi’s coming Fixed Income Symposium is timed to go live just days before the next FOMC meeting. The Symposium goes live on the 24th the next FOMC meeting is scheduled for July 25th – July 26th. Investors looking to get ahead of any news and make strategic choices will have an opportunity to hear from fixed income experts such as Simplify’s CEO and co-founder Paul Kim and Panagram Structured Asset Management’s Managing Director Danielle Gilbert. The next six months will be critical for investors, and figuring out the best way to take advantage of the opportunities in fixed income is important for any advisor seeking the best outcomes for their clients.
Register for the Fixed Income Symposium here.
For more news, information, and analysis, visit the Fixed Income Channel.