- 'Cancer of Fraud' Permeates Health Care System: Critics
- For Many in US, It Will Be a Scaled-Down Holiday Season
- Judge Erases Couple's $525,000 Mortgage Payment
- Where Do Pardoned Turkeys Go?
- Foreign Demand Boosts US 7-Year Treasury Sale
- Google CEO Schmidt Makes Secret Visit to Iraq
- New-Home Sales Jump to Highest Level in Over a Year
- Consumers Catching the Holiday Spirit
- Jobless Claims Below 500,000, Durable Orders Slip
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- S&P Stocks Trading at New 52-Week Highs
- 4 Food Stocks to Stuff in Your Portfolio: Analyst
- S&P at 1050-1200 Trading Range Next Year: Strategist
- Treasury On Mortgage Modifications
MOST SHARED
- Ritz-Carlton ?Struggling? in the US: President
- Garlic Price Rises Surpass Gold, Stocks in China
- S&P Stocks Trading at New 52-Week Highs
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- Oil Price to Average $75.40 in 2010: Poll
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Jobless Claims Below 500,000, Durable Orders Slip
- Consumer Mood Improves, But Anxiety Over Personal Finances
- Judge Erases Couple's $525,000 Mortgage Payment
- Black Friday: Can Banks Tap the Frenzy, Too?
Text Size 
Goldman Sachs Senior Investment Strategist Abby Joseph Cohen told CNBC Wednesday that she sees U.S. interest rates climbing, though not necessarily in the short term.
"In our intermediate to our long-term work on the stock market, we are assuming that interest rates will be moving higher, not necessarily right away," Cohen said. "This is a Fed that is not anxious to lower interest rates again aggressively any time soon."
Cohen also said that Goldman Sachs expects sluggish economic growth and corporate profits.
"We think that this is a stock market that will spend most of its time, as it has in recent weeks, between 1300 and 1400 on the S&P 500, but as we move out in the next few months, fair value is probably closer to 1500 on the S&P 500," she said.
The Federal Reserve's view on inflation relates to headline inflation rather than core inflation, said Cohen.
"This is a different sort of stagflation environment," she said. "It's not one in which it's deeply embedded in the structure of the economy and the structure of compensation, but it's very much headline related and related to commodities." (See the entire interview in the video at left.)
Meanwhile, Paul McCulley, managing director Pimco, told CNBC that there's not much the Federal Reserve can do to ease economic turmoil.
"They recognize that the economy is weak, but they want to go on a hold now because they look at it as counterproductive to go even lower, particularly since they lowered Fed Funds Rate, gives you a lower dollar and then fuels commodity speculation," he said. "The Fed is between a rock and a hard place, and it's going to sit on its backside."
McCulley, who remains focused on the corporate bond market, points to financials as particularly attractive right now.
"The financials are having to issue a great deal of new capital, both debt capital and equity capital," he said. "So if you are a believer that the financial system in America is a growing concern, that is an excellent area to get into."
Investors should ask themselves whether Treasury bonds remain attractive in an inflationary environment, said Cohen.
"We think that equities in general tend to be a pretty good hedge against inflation," she said. "Equities and shares do well in a period of moderate inflation."
Print
Email
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.
Data is a real-time snapshot *Data is delayed at least 15 minutes