April 8, 2025
The Federal Reserve is the most potent force in the financial markets. With every rate hike or cut, markets react. But what happens when the Fed can’t decide which way to go?
In the 1970s, the Fed raised rates to fight inflation, only to cut them when the economy slowed. This back-and-forth led to uncertainty, volatility, and repeated recessions.
We’re now seeing a similar dynamic:
The Fed has paused rate hikes, but inflation remains sticky.
If inflation stays high, they may need to raise rates again.
If growth slows, they may cut rates too quickly, creating new risks.
For investors, this means market volatility is likely to persist. So, how can you navigate this environment?
The key is to position your portfolio for multiple outcomes—whether the Fed tightens or eases. We dive into these strategies in our latest blog:
Outlook 2025—Lessons from the 1960s-70s for Today’s Investors
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A diversified portfolio does not assure a profit or protect against loss in a declining market. Past performance is not an indication or guarantee of future results. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.