So, the Federal Reserve remains ‘all in’, the taps remain on. Economists though were split, post Jay Powell’s latest communication that the Committee will continue to snaffle assets, and may do so for a bit longer than expected, but will refrain from buying more. At least not yet. Some observers thought this showed strong commitment, others spoke of a “missed opportunity”, as the near-term data deteriorates and fears of long-term scarring continue to ruffle the feathers. “We don’t think the economy suffers from a lack of highly accommodative financial conditions, we think it’s suffering from the pandemic,” the Chair added, in case those at the back hadn’t heard. Is there though, given the lag-effects of stimulus, cause to whisper a suggestion that the economy has more than enough heat in the tyres? Some analysts talk about herd immunity being reached in May, by which point there will be more than enough rubber on the road. This is likely to pressure the yield curve, and whilst the Fed may lend its considerable weight to the short end of the curve, the belly might start to rise. Buy banks? Perhaps. Banks will do fine, but the investment case for banks, given all the moving parts, is complicated. A cleaner play on the rising rate environment might be the online brokerages, a fast consolidating sector that offers a very clean, and very exciting, upside opportunity. On the one hand they are high return, secular growth businesses as more and more people manage their own money online and independent financial advisors opt for electronic platforms, and on the other they have much higher gearing to rising yields. They make most of their money from the interest they generate on client cash balances. Valuations for these types of businesses are also, currently, at historic lows. Now there is a risk the Fed may choose to sit on the entire curve, to flatten the whole lot; but with a recovery in the air, the pressure on yields running into a post pandemic environment looks somewhat skewed to the upside – whatever the next couple of months may hold.