The Federal Reserve today kept the federal funds rate unchanged at 1?%, noting in a statement that growth in consumer spending remains uncertain, despite the recent upward swing in economic activity.
Casey Colton, American Century vice president and portfolio manager, said the decision was no surprise. When the Fed finally sees data that consumer spending is picking up, short-term rates will be heading higher as quickly as they came down, he said. For fixed-income investors, "you have to position yourself to be ready for that change. If you make that move too soon, there is an (opportunity) cost for your portfolio.