'Hike Doesn't Change Fundamentals,' says Cetera's Goldman

Summary

Gene Goldman, CIO of Cetera, argues the Fed's latest hike is likely a one-and-done or two-and-done move rather than the start of aggressive tightening. He says markets priced in too much, higher long-term yields are already tightening conditions, and a divided Fed will be more data-dependent. On equities, he favors the U.S. over non-U.S. markets and expects a dollar rally to pressure international and emerging-market assets.

• Fed hike described as insurance against sticky inflation, not a return to aggressive tightening.
• Higher long-term yields and mortgage rates are already doing the Fed's work.
• Inflation was already slowing, with core services distorted by a one-off wireless price change.
• The Fed is seen as divided and likely more data-dependent after the hike.
• U.S. equities are preferred over non-U.S. equities.
• Dollar expected to rally, pressuring international and emerging-market assets.
• Last year's non-U.S. equity rally criticized as low quality.