Charles Schwab: short-duration stocks will outperform amid high rates

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Charles Schwab highlights a part of the stock market that will outperform if interest rates stay high

Stocks have been throttled by high volatility and rising interest rates over the past year, but there's an area of the market that could outperform as long as rates stay high, Charles Schwab said.

That's thanks to rising short-term interest rates, with central bankers hiking rates over 1,700% in the past year to control inflation. The aggressive tightening cycle has, but it's been positive for short-duration stocks, which have more timely cash flows. Markets initially raised the odds that the bank's failure would spur the Federal Reserve to cut interest rates later this year.

 

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