3 Insurance ETFs for a Rising Rate Environment

As the Federal Reserve eyes a tighter monetary policy, investors can look to insurance ETFs that could capitalize on rising rates.

Yields on benchmark 10-year Treasuries have jumped to 2.32% after dipping to 2.0% earlier this month.

Pushing yields higher, many traders anticipate the Federal Reserve to embark on interest rate normalization, with the next major hurdle coming up in December. Supporting the rising rate bets, Philadelphia Fed President Patrick Harker said Friday he still anticipates the central bank to hike rates in December, Reuters reported.

In a speech at his regional Federal bank, Harker said he “penciled in” a December move, along with three more in 2018, putting the Philly Fed president with the majority of central bank officials as the labor market looks robust.

“Labor markets feel really tight,” Harker said at a conference in Philadelphia, adding that it was appropriate for the Fed to take a pause for now in raising rates as it begins to shrink its $4.5 trillion balance sheet.

Low inflation, though, is a concern, especially since the Fed may be under-estimating productivity, so it may also be over-estimating inflation.