Why I Was Wrong About Interest Rates, so Far

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

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