Mainstay Capital Has Been Out of Interest Rate-Sensitive Bonds, CEO Says

The video discusses concerns about the Federal Reserve's policy on normalizing interest rates amidst inflation and global economic slowdown. It highlights the risks of yield curve inversion potentially leading to a recession and the impact on rate-sensitive assets. The discussion also covers market reactions, particularly in the US equity markets, and the implications for asset allocation strategies. The video concludes with strategies for diversifying risk in equity portfolios.

What is a major concern when the Federal Reserve raises interest rates?

• Decreasing global growth

• Inverting the yield curve

• Increasing inflation

• Strengthening the US dollar

How did the ratio between S&P 500 banks and utilities change recently?

• It remained stable

• It increased by 20%

• It fell by almost 20%

• It doubled

What is the concern regarding the secular bull market in bonds?

• It started in 2016

• It ended in 2016

• It has no impact on interest rates

• It will continue indefinitely

What is the strategy mentioned for dealing with interest rate-sensitive securities?

• Investing more in Treasurys

• Focusing on short-term bonds

• Staying away from them

• Increasing exposure to high-grade corporates

What is a key concern for asset allocation strategies in the context of rising interest rates?

• Reducing equity exposure

• Diversifying risk

• Increasing bond holdings

• Focusing on a single asset class