April 2015

What’s Inside

  • The Fed’s forward guidance has made clear their intent to move away from the Zero Interest Rate Policy (ZIRP), potentially in September or December.
  • In the more recent cycles, all credit maturities produced positive total returns across the curve despite many doomsday warnings of capital losses surrounding bonds.
  • Two factors are likely to influence policy: First, U.S. growth and inflation outlooks do not warrant a substantial or rapid increase in the Fed Funds rate. Second, global central bank policy, disinflation pressures, and economic risks abroad may constrain the Fed and Treasury yields.

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