Chart: Two scenarios for Fed rate hikes

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The Fed is expected to raise rates this year. But investors can prepare with these two possible scenarios.

 

  • The Federal Reserve is expected to begin raising rates this year. And one question driving market volatility is: "How much tightening?"

 

  • We see two likely scenarios for rate hikes this year: a more measured path and a more aggressive path. The route the Fed takes will be largely driven by its assessment of inflation risks and the health of the labor market.

 

  • For investors, the challenge will remain staying focused on their long-term goals through this period of volatility. Consider flexible fixed-income strategies that can pursue opportunities — regardless of which path the Fed takes.

 

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