Fed Hike: Will One Interest Rate Rise Impact Bonds?

In the near term, the slow-raise policy signalled by the Federal Reserve would have minimal impact on corporate bonds

Dave Sekera, CFA 15 December, 2015 | 11:01AM

 

Dave Sekera: It has been an unprecedented seven years since the Fed lowered the federal-funds rate to its current zero interest-rate policy. While economic growth has been generally lackluster since the recession ended 25 quarters ago, there have only been two quarters of negative real GDP growth, and unemployment has dropped from 10% to 5%. Thus far this year, GDP has risen at an average rate of approximately 2.25% and the monthly increase in payrolls has averaged over 200,000 per month.

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About Author

Dave Sekera, CFA  is a senior securities analyst with Morningstar.

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