Investors are concerned about the impact of the Fed’s 525 basis points in rate hikes since March 2022 on the economy and the survival of U.S. GDP if rates remain at current levels for most of 2024.

Near-term uncertainties, such as energy prices, an auto workers strike, a government shutdown, and the end of the student loan moratorium, cast doubt on an economic “soft landing” where the Fed can gradually lower inflation without creating a recession.

Long-term investors should increase duration risk and leverage selloffs to mitigate potential risks.