Fed Rate Hike Expected to Boost Volatility

Here’s What We’re Thinking

March 27, 2015

The U.S. Federal Reserve is gearing up to start raising short‐term interest rates. Whether the Fed starts raising rates in June, September, or in 2016 is the hottest topic in capital markets these days. Our own leaning is a Fed rate hike toward the end of this year. However, unlike the uncertainty surrounding the Fed’s rate hike timetable, we are a lot more confident in projecting that market volatility, which is already running higher than 2014’s average, will trend higher as we approach the first Fed rate hike.

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