Recently released minutes from the Federal Open Market Committee’s July 26–27 policy suggest that the Federal Reserve will continue raising interest rates at an aggressive clip. According to the minutes, Fed officials saw “little evidence” that inflation pressures were easing and expressed resolve to bring down inflation.
While not providing specific guidance for future increases, officials said they’d be closely watching data before deciding on rate hikes. “Moving to a restrictive stance of policy was required to meet the Committee’s legislative mandate to promote maximum employment and price stability,” the minutes said.
However, officials from the U.S. central bank suggested that if the rate hikes appear to be having their desired effect, then they could begin to dial back on said hikes.
“As the stance of monetary policy tightened further, it likely would become appropriate at some point to slow the pace of policy rate increases while assessing the effects of cumulative policy adjustments on economic activity and inflation,” the minutes added.
With the Fed suggesting that they plan to continue its hawkish plan to fight inflation, investors may want to take a more proactive approach to investing in fixed income. That’s where an active fixed income manager can help.
Passive strategies often lack the flexibility to adapt to changing market environments. Meanwhile, active bond ETFs can offer the potential to outperform fixed income benchmarks and indexes.
“Navigating the bond market is even more challenging for advisors this year as bonds fall in value,” said Todd Rosenbluth, head of research at VettaFi. “However, the ability to tap into the expertise of experienced managers along with the liquidity benefits of an ETF has been compelling.”
As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed fixed income ETFs, including the T. Rowe Price QM U.S. Bond ETF (TAGG ), the T. Rowe Price Total Return ETF (TOTR ), and the T. Rowe Price Ultra Short-Term Bond ETF (TBUX ).
T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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