Four dissents at the Fed meeting, the most since 1992, with three dissenting against the statement's easing bias and one (Stephen Meyer) dissenting in favor of a rate cut. This shows significant disagreement on the path forward, not surprising given elevated inflation and geopolitical risks (Iran, Strait of Hormuz). The economy is holding up, as seen in GDP data.

The unemployment report next week and upcoming Fed speakers will provide more clarity on the economy and policy direction.

Prolonged Iran tensions could keep oil prices elevated, feeding into broader inflation (shipping, packaging costs). The Fed historically looks past one-off oil shocks, but if it lingers, inflation stays high. With the economy resilient, the Fed is likely on hold for the next few meetings. Short-term rates will stay buoyed, with volatility as markets interpret Fed commentary and data.

The longer the situation lingers, the more likely elevated oil prices persist, raising inflation risks.

No single data point confirms the view; it's a culmination. Longer-term rates have a floor and mild upside because the Fed is on hold, inflation expectations are unlikely to move lower, and growth is stable. The employment report next week will be telling for the economy's recent performance.

The floor on longer-term rates comes from the Fed being on hold, while upside is limited to mild due to stable growth and sticky inflation expectations.

Recommends core holdings (Treasuries, MBS, investment grade corporates, munis for high tax brackets). For more credit risk, preferreds are attractive due to higher yields and stable finances of issuing banks/finance firms. Risk: preferreds often have long or no maturities, so rising rates could hurt total returns, though higher coupons provide a buffer.

Preferreds are issued by banks and finance corporations whose finances are doing alright, making them relatively stable.