But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Why rising supplies continue to threaten crude prices
Crude prices started the week on a negative note by falling around 1% after fluctuating between gains and losses in the wake of the Greece elections.
A slowdown in emerging markets could cause rates to stay low. China (FXI), which is growing at 7.3%, is the biggest concern.
Softening growth in the US could cause yields and interest rates to remain low.
Low interest rates have supported the economy, but another side effect of low interest rates is that it discourages household savings.
Falling inflation rates could cause interest rates to remain at very low levels. The Fed could take a dovish stance and keep interest rates unchanged.
Many investors are asking whether this year might be the year when interest rates begin to rise.
Though the Fed has decided to remain patient in this meeting, it’s still open to raising the interest rate this year.
Equities reacted negatively to the FOMC statement. Equities expected the Fed to hike rates this year, reading the statement as more hawkish.
In its latest statement, the FOMC says that the timing of an interest rate hike will depend, apart from other factors, on “international developments.”
The FOMC is hopeful that further improvements in the labor market will help inflation rise, as more people with jobs and higher wages start consuming more.
Job gains may have been strong, but two other measures are also important—the labor force participation rate and average hourly wage growth.
Policymakers are very positive about the US economy. And, good economic growth hints at robust consumer spending.
The Fed has decided to remain accommodative and not sell off all these bonds. This should keep long-term interest rates low and support the mortgage market.
The Federal Reserve stance implies that the federal funds rate will remain in the target range of zero to 0.25%.
With core inflation at 1.6% and the ten-year Treasury yielding around 1.8%, low real Treasury yields mean you’re hardly compensated for inflation.
Treasury yields could rise due to a number of factors. There are a few cases that can be made for buying Treasuries.
Treasury yields have dipped over time. A bond’s coupon, yield, and price interrelate.
A low inflation rate in December caused a dip in Treasury yields. Inflation hit its lowest level in December since the Great Recession.
Growth in Europe (EZU) has been weak for a while now, which is concerning. But soft global growth could support bonds.
Siluanov confessed that Russia would have to put certain projects on ice for the time-being to finance the anti-crisis plan. But Crimea will go ahead.