If the Fed Raises Interest Rates This Month, History Says This ETF Could Be a Fantastic Buy
The Vanguard Energy ETF may be a surprising choice in advance of a Fed rate hike, but it's got history on its side.
Overview
Investors, buckle up because the next Federal Open Market Committee (FOMC) meeting starts on Tuesday, Sept. 15, and spans into the next day. In advance of the central bank's next meeting under new Chair Kevin Warsh, Fed funds futures, which are used by professional traders to potentially capitalize on Fed decisions, imply an 87.3% chance that a rate hike is coming.
That expectation is justified because the August Consumer Price Index (CPI) reading released last week came in hotter than expected. Getting down to brass tacks, some Fed members are overt in their desire to ward off inflation, and raising interest rates is a preferred "blunt tool" of central banks to accomplish that objective.
If the Fed raises rates, this Vanguard ETF could rally. Image source: Getty Images.
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Source
Originally published at www.fool.com.