Why I Was Wrong About Interest Rates, so Far
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Fed actions to fight inflation by raising interest rates have not in fact increased interest rates. It’s a puzzle.
Last month I advised abandoning stocks and bonds in favor of inflation-protected alternatives. That hasn’t worked out. I have not changed my mind. Interest rates will increase and cause losses in stock and bond markets.
Last month I wrote How I Protect Against the Coming Market Crash, summarized as follows:
- Interest rates are going up, so bond and stock prices are going down.
- You can ride it out, but it could be an awfully long rough ride.
- The other option is to move out of stocks and bonds and either (1) hold other assets or (2) hedge your stocks and bonds