Lauren Goodwin, economist and chief market strategist at New York Life, said long-term investors should ignore the daily noise around interest rates and focus on generating income over the next 10 years. It’s easy to get caught up in the daily grind, especially during a week like this, Goodwin said during a special discussion with CNBC Pro on the sidelines of the Future Proof conference in Huntington Beach, California. The Federal Reserve is set to cut interest rates for the first time in four years on Wednesday, with the November election looming. (See the full discussion above.) “If you’re looking at a five-year, 10-year, 15-year investment horizon, it doesn’t matter what the Fed cuts or the ebb and flow of the election cycle,” Goodwin told the host Zhu Ming said. Where to Invest: Bonds and Artificial Intelligence The strategist believes that interest rates are likely to remain high over the next decade as neither side takes on deficit spending. To capitalize on this backdrop, Goodwin recommends focusing on income strategies through investment-grade corporate and municipal bonds, which are also tied to the construction of artificial intelligence infrastructure. “We see very attractive potential opportunities in the municipal bond space,” she said. “So, depending on what investors want, there is a way to balance the potential interest rate risk in the medium term while still locking in higher rates.” Goodwin also believes that investing around artificial intelligence is a smart long-term strategy in this area. Heavy investment continues. We’re “seeing huge investments in the base layer of artificial intelligence, the Big Seven, the chipmakers, and just the early stages of the infrastructure,” she said. “But because we’re seeing not only governments and companies but also consumers investing in artificial intelligence Smart use cases, we expect that investment to continue, but what’s likely to happen is that it will expand.”
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