Two Ways To Play: Interest Rates Get Interesting
Strengthen your portfolio in good times and bad.
In a speech today in South Carolina, Lacker joined his cohorts, saying downside risks to economic growth have "diminished appreciably" in recent weeks and reversing the interest rate cuts make "eminent sense."
Earlier this month other Fed members made similar comments that the risks to the economy have eased. Analysts believe the Fed is more concerned now that the recent surge in energy costs and food could become rooted in public expectations, which would then further accelerate prices.
The next FOMC meeting is scheduled June 24-25. Fed Funds futures imply a 72% chance the Fed will leave interest rates unchanged but also a 52% chance the Fed may increase rates a quarter percent to 2.25%.
From the Bull Pen: The gold ETF (GLD) was a buy off its 200 DMA. Bulls can continue to look to the yellow metal for an upside play as inflation symptoms continue to negatively affect the economy.
From the Bear Cave: Given a stagflationary environment, Bears might find an upside play in the TBT, the Ultrashort Lehman 20+ year Treasury ETF. This fund seeks investment results that correspond to twice the inverse of the daily performance of the corresponding Treasury Bond.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter