A raging bull market paired with data from the Department of Commerce showing that gross domestic product rose 4.2% in the second quarter gives Federal Reserve Chairman Jerome Powell ample reason for investors to get swept away by a wave of rising interest rates in the central bank’s forthcoming monetary policy decisions. However, fixed-income investors can use specific exchange-traded funds (ETFs) as life jackets in the rising tide of rates that could come through the rest of 2018 and possibly beyond.
With no signs of slowing, it appears that a healthy flow of rising rates is in order, according to Boston Federal Reserve President Eric Rosengren. With a monetary policy meeting slated for later this month, Rosengren also forecasts that the current federal funds rate will float between a range of 2.5% to 3%.
“Gradually increasing over the course of this next year makes sense,” Rosengren told CNBC in an interview. “If things work out well for the economy, and that’s what I expect and hope, then we’ll be in a situation where we need to have somewhat restrictive policy over time.”