What the Fed does with rates will depend on what happens to the economy: the better the growth rate, the faster the Fed will move to boost rates, and vice versa. Above all, Yellen argued, the Fed doesn’t want to be “locked into” any kind of forward guidance outlook.
That still leaves investors facing the potential twin terrors of a secular revolution in the bond market triggered by the Fed’s eventual decision to raise rates and a cyclical shift in the stock market after a long bull run.
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