Investors unsure about strategy as rate hike looms

0 Comments | USA TODAY, April, 2004 | by Adam Shell

NEW YORK -- The Fed says a hike in short-term rates is coming. But when?

Federal Reserve chief Alan Greenspan acknowledged last week what most investors have long suspected: The central bank will have to boost interest rates at some point to cool the suddenly hot economy.

But it's what Greenspan didn't say that's causing angst on Wall Street. Without knowing when the first hike will come, how big it will be or if more hikes will follow, it's tough for traders to position their portfolios.

Wall Street is split on how higher borrowing costs will affect stocks. Citing historical patterns, Russ Koesterich, chief U.S. equity strategist at State Street Global Markets, expects higher rates to result in "diminished returns." In contrast, Andy Engel, senior research...