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Possibly Three Fed Rate Hikes This Year-Dump Bonds Holdings??

rhinefire

rhinefire

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With three possible rate hikes this year I dumped by bonds position for CDs not only because of the rate hikes but because with the recent market surge in 2017 is it not time for a correction this year?
 
rhinefire said:
With three possible rate hikes this year I dumped by bonds position for CDs not only because of the rate hikes but because with the recent market surge in 2017 is it not time for a correction this year?
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You are quite right. If rates double bond holders will see large losses. I wonder how the FED will handle its mark to market hit.

A similar question for the economy might be the impact on equity, however.
 
rhinefire said:
With three possible rate hikes this year I dumped by bonds position for CDs not only because of the rate hikes but because with the recent market surge in 2017 is it not time for a correction this year?
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What is the material difference between bonds and CDs?
 
washunut said:
What is the material difference between bonds and CDs?
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Bonds decrease in market value as interest rates increase. CDs offer greater interest flexibility in responding to interest rate increases because there are a greater number of CD options. It could be a while before traditional CDs reflect the interest increases announced, but there are other options with CDs that allow upward adjustment in interest rates.
 
The Fed is full of it.

Ever year the Fed promises rate hikes.

Every year everyone believes them.

Every year they are proven wrong.


No way the Fed raises rates 3 times this year...UNLESS, they are afraid of a recession and are desperate to put some ammunition in their gun to fight it.
 
Remember folks...this is only the third hike from the Fed in ELEVEN YEARS!?!

Despite them saying for many years how they wanted to raise rates.

All the Fed seems to watch these days is the equity markets.
 
DA60 said:
Remember folks...this is only the third hike from the Fed in ELEVEN YEARS!?!

Despite them saying for many years how they wanted to raise rates.

All the Fed seems to watch these days is the equity markets.
Click to expand...

do you think its coincidence that the equity markets are higher than ever and the Fed wants to raise more than ever?
 
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