The Fed could have overtightened monetary policy with its nine rate hikes as signaled by a flattening of the yield curve, potentially opening the door to a shift in the investment climate that rewards investors in bonds while equities experience mediocre returns.
- Could Fed’s multiple rate hikes reshape U.S. investment climate?
- An investment ‘winter’ could benefit bonds, especially at short-end of yield curve
- In such an environment, equities could see mediocre or even negative returns
- Markets could see surge in volatility if Fed does not ease monetary policy soon.
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