Voya’s Reinhard Says Impact Of Fed Meeting, Data Crosscurrents Leaving Investors “Whipsawed”
In a multi-segment appearance on Bloomberg TV, Voya Investment Management Managing Director and Head of Asset Allocation Barbara Reinhard said since the Federal Reserve’s most recent meeting, “bond yields peaked, and equity started to struggle,” which has “been a realization, and incorporating new information from the Fed that they are going to count this current surge in inflation towards their long-term goal of meeting two percent. And the change in that is that the markets are pulling towards the expectations that the Fed will start hiking rates into 2022.” Asked about a downside threshold for bond yields where she might become “a little bit more concerned,” Reinhard said, “when bond yields get down that low, they don’t become quite as an effective hedge against Treasurys, and that is very concerning, especially for people that are asset allocators. And unfortunately, if they go up too high, it starts to scuttle some parts of the more cyclical avenues in the market, such as homebuilders and cyclicals.”