Last week, the Federal Reserve announced their new policy on tapering. ISI Group calculates that if the Fed continues on this new track, they would buy $455 billion more of bonds in 2014 before the taper finishes.
- Good news: New policy, gradual taper, means interest rates weren’t forced to spike
- Bad news: Not likely of staying on track. Stronger employment data and economic growth early in 2014 would make the Fed taper at faster rate, driving interest rates up.
- What we are doing about it: Product-specific, but tactics would include researching managers who perform well in a rising interest rate environment or utilizing inverse ETFs
Click the play icon below to launch the audio recording.
The views expressed above are those of Brinker Capital and are not intended as investment advice.