The Fed raised interest rates for the first time this week since 2018. The Federal Reserve plans to be more aggressive with rate hikes in what Federal Reserve Chairman Powell described as “Rampant Inflation.” Powell seems poised to keep his foot on the gas as he promises to take tough action on inflation.

Goldman Sachs is forecasting 50bp hikes at both the May and June meetings, followed by 25bp hikes at the four remaining meetings in the back half of 2022 and three quarterly hikes in 2023Q1-Q3,” wrote Goldman economists Jan Hatzius and David Mericle. Goldman left its forecast of the terminal rate unchanged at 3% to 3.25%.

The economists noted that Powell reiterated the call “to move expeditiously” at the end of his statement.

“There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability,” added Powell.

Unlike former Fed chiefs, Powell appears to be more accommodative toward telegraphing his moves so as not to send even more ripples through an already uncertain economy. Whatever the case, more expensive money is on our doorstep and certain parts of the economy will feel it more than others.

Now is the time to start reallocating assets. Alternative asset classes are gaining more favor as stocks are volatile and fixed income has been decimated. The ‘ole 60% stock and 40% bond asset allocation just won’t do what it’s historically done.

Turning to Senior Life Settlements as a way to differentiate assets in your portfolio is one way to harbor gains made in equities and real estate for the long haul. Life settlements exhibit a low correlation to riskier assets and avoid the effects of geopolitical and mass risk events. Now’s the time to start thinking about memorializing gains in your portfolio and managing risk in a new and smart way.

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