Rates And Reality

By AdvisorShares:

By: Tim Gramatovich, CFA, CIO & Heather Rupp, CFA, Director of Research for Peritus Asset Management, the sub-advisor to the AdvisorShares Peritus High Yield ETF (NYSEARCA:HYLD)

With the last week of July’s 4.0% GDP number and FOMC meeting statement, concern seems to re-emerge that rates will be headed higher in the near term. The Fed has said that they will keep rates low for a “considerable time” once the asset purchased have been eliminated, presumably by the fall of this year. However, some speculate that there is enough of an improvement in the underlying economy that this move up is coming soon.

It seems premature to say that the 4% initial number in Q2 is a sign of a sustained improvement versus just a bounce back after an incredibly weak Q1, especially with 1.7% of the gain attributed to an inventory build and all of the GDP revisions we have

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