We continue to believe the Fed will place greater emphasis on its employment mandate than on managing inflation to the 2% target. Rising long-term interest rates and the steepening yield curve hold several implications for investors. We do expect interest rates to reverse course and head higher over coming months as the global economy recovers. We note that a wider spread between short-term and long-term bonds is beneficial for most of the Financial Services sector, which we recently moved to Over-Weight.
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