Nonetheless, as the Fed was instituting four rate hikes in 2018, Amazon was quick to add more government bonds to their portfolio to take advantage of rate increases. During the fourth and final rate hike of 2018, the Fed forecasted two more rate hikes were in store for 2019.
“The change toward U.S. government securities is more a matter of benefiting from attractive interest rates,” said Daniel Aobdia, an accounting professor at Northwestern University’s Kellogg School of Management.
According to Aobdia, Amazon’s move to government bonds speaks to the prescience of the online retail giant and where the economy may be heading.
“Amazon has become so large that they must have some good insights about where the economy is headed by looking at how their different businesses are doing,” Aobdia said. “Overall, expectations of increased interest rates would be consistent with a more robust economy.”
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