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Fed Rate Hike Isn't Big News for Pension Plans, Yet
Bloomberg BNA Mar. 20, 2017
"The Fed's .25 percent increase to the federal funds rate directly affects short term interest rates, but not the long-term, high quality corporate bond rates that pension plans are sensitive to. In fact, long-term rates have dropped from about 4.25 percent to around 4.1 percent since the Fed began raising short-term rates in December 2015.... Sponsors would be wise to construct models measuring the consequences to their plan's funding in anticipation of long-term rates rising by as much as 75 basis points[.]"
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