The Federal Reserve first began its asset purchase program in the fall of 2008 to combat the financial crisis. Almost five years later, with slow GDP growth, high unemployment, and non-present inflation, the Fed is well into its third purchase program. Some investors fear these actions will spark higher inflation. We believe this shouldn’t be a concern — at least in the short run. Moreover, we believe any temporary uptick in inflation or bond yields are opportunities to increase the yield and lengthen the duration of a fixed income portfolio.
Read the Article (PDF)