Investors are Scared. Is it Time To be Greedy?

The last time increasing interest rates made investors this nervous was in 2018 when the Federal Reserve hiked rates four times between March and December while reducing bonds on its balance sheet.

Sound familiar? The Fed’s using the same playbook this year, albeit more aggressively.

The Fed has already increased interest rates by 0.75%, and earlier this month, it said it would begin reducing the number of mortgage securities and Treasury bonds it owns beginning in June.

The “Don’t Fight the Fed” adage has contributed to a nearly 30% decline in NASDAQ stocks from the November peak. The S&P 500 has fared better, but it’s still fallen almost 20%. And Treasury bonds have gotten hard hit too. For example, the iShares 20-year Treasury ETF  (TLT) – Get iShares 20+ Year Treasury Bond ETF Report is down over 23%.

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