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Other winners were insurance companies, “which had been suffering,” and “less obvious areas like discount brokers.”
“These companies not only benefit from a rotation out of bonds into stocks, but they have these large money balances, so their net interest margins will explode,” he said.
Overall, Kass said the economy would continue to “muddle through” for the time being.
“I don’t believe interest rates will rise because of a vigorous economic recovery,” he said, forecasting 1½ percent GDP growth in the near future.
“We’re going to see a flight to safety in bonds,” he said. “That will be the main factor that leads to a rise in rates.”
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