As investors navigate the Federal Reserve's higher-for-longer interest rate policy — and eventual rate cuts down the road — they should make sure they have their fixed-income portfolio positioned properly, according to Wells Fargo.
The Fed last raised rates in July 2023, bringing the fed funds rate to a range of 5.25% to 5.5%.
But investors were buoyed by news Wednesday that the consumer price index showed inflation eased slightly in April.
Right now, Wells Fargo anticipates two rate cuts this year and just one in 2025, bringing the Fed's target rate to a range of 4.5% to 4.75% by the end of next year, said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
Investors can get exposure to intermediate-term bonds through mutual funds or exchange-traded funds.
Persons:
Jerome Powell, Wells, Scott Wren, Wren
Organizations:
Federal, Wells, Wells Fargo Investment Institute
Locations:
Wells Fargo