I penned the original post on 3/17. Why did it take this long for investors to realize that the Fed wasn’t kidding? US interest rates, particularly on the backend of the curve, have moved massively over the last two days. This move up in rates is far from done. The impact on our capital markets is just being felt. The first quarter for bonds was the worst one we’ve experienced since 1981. Total return bond programs will continue to get hurt. It is time to do something different or Pension America will suffer severe consequences.
Russ where do we go from here?
Hey Wes – Great to hear from you. I think that the Fed is singularly focused on controlling inflation. Given the many contributing factors to our current inflation – wages, supply chain issues, oil/energy, war, etc. this process may take a while. I don’t see how the yield curve doesn’t continue to ratchet higher across maturities. Where it stops????? Plan sponsors are once again being foolish allowing the markets to whipsaw their plan’s funded status and contribution expenses. What do you think?
Right on Russ. Please see https://401kspecialistmag.com/why-the-fed-is-caught-in-an-inflation-trap/
Thanks for sharing, Ron! I hope that all is well with you. Russ