“Assuming that the Fed is not making a policy mistake here, we believe that fixed income assets on the riskier end of the spectrum should benefit from its long and gradual process, including senior floating rate loans and higher-quality high yield bonds,” he said.
“Select emerging markets debt also looks appealing from a valuation perspective,” Tank added. “On the equity side, the prospect of slowly increasing rates reflects better growth, and thus could be supportive of share prices. However, a key concern is the path of corporate earnings and whether current stagnation in the U.S., reflecting energy company weakness and dollar strength, among other factors could continue.”
