Investors Are Seeking Interest Rate Stability: Economist

Yahoo Finance Live sits down with Annex Wealth Management Chief Economist Brian Jacobsen to discuss the probability of another interest rate hike by the Federal Reserve. Jacobsen says the Fed’s decision to “proceed carefully” with rate hikes going forward is wise, following what he described as officials previously “proceeding recklessly.” However, he notes that bond yields reaching around 4.5% does risk additional hikes.

Jacobsen explains that typically the level of yields itself is not problematic, but rather the speed at which rates change. He states that more stability in interest rates “aids business owners and consumers in long-term planning” by giving them time to adapt to the shifting economic landscape. However, the uncertainty surrounding fluctuating yields will likely result in investors and consumers proceeding very cautiously when it comes to “spending plans and investments”, overall affecting broader economic conditions.