Majority of Investors Anticipate Gradually Rising Interest Rates


Last month’s Asset Allocation Survey special question asked AAII members how the Federal Reserve’s decision to unwind its balance sheet is affecting their expectations for interest rates. Nearly 70% anticipate interest rates will rise, though the majority of these respondents believe the rise will be slow and gradual. An additional 20% of respondents think the unwinding of the Fed’s balance sheet will either have gradual or no impact.

Here’s a sampling of the responses:

  • “I expect interest rates to gradually and moderately increase over the next few years.”
  • “I’m expecting them to gradually rise.”
  • “None. A wise decision to unwind as long as it is done on a gradual basis.”
  • “[Interest rates] should rise. Although easy money from foreign governments should keep them from rising too quickly.”
  • “Interest rates will rise at a slow, but steady rate and will not cause significant market disruptions.”

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