Best Performing Assets Since Rates Bottomed
Today the Fed unsurprisingly held rates steady and commented that “the case for an increase in the federal funds rate has continued to strengthen.” The Fed continues to prepare the market for a December rate hike and yields have responded. The US 10-year yield bottomed in July and has been rising since on higher inflation expectations and said interest rate hike expectations. So what assets have performed since yields bottomed?
The following chart from Strategas Research Partners shows the breakdown. Volatility is up 50% due to recent uncertainty around the election and investors have been hedging/repositioning. From a sector perspective Banks and Technology have benefitted from higher rates while defensive sectors and bond proxies (Telecom, REITs and Utilities) have suffered.