This article is about how people who invest money are trying to guess what will happen with interest rates in the future. Interest rates affect how much it costs to borrow money, and that can have a big impact on different parts of the economy, like businesses, housing, and the government. Right now, some smart people called the Federal Reserve think they need to raise interest rates to control inflation, which is when prices of things go up too fast. But some investors think that the Fed might change its mind later and not raise rates as much as everyone expects. This could cause problems for banks, small businesses, and other parts of the economy if interest rates end up higher than people are expecting. The article also says that some stocks that usually do well when interest rates go down are not a good deal right now because they might lose value if interest rates go up more than expected. Read from source...

- The article title is misleading as it implies that there is a convergence of expectations among investors and policymakers when in fact the author admits that the Fed and market participants are missing the implication of sticky services inflation for the terminal policy rate.

- The author uses vague terms like 'comfort' and 'pressure' without quantifying them or providing any evidence to support their claims. This makes the article sound more like an opinion piece than a well-researched analysis.

- The author seems to have a bearish view on interest rates, as they repeatedly emphasize the negative impact of higher policy rates on various sectors of the economy and financial markets. However, they do not acknowledge any potential benefits or positive outcomes of tighter monetary policy, such as reducing inflationary pressures, stabilizing the dollar, or attracting foreign capital.

- The author also seems to have a bias against banks, small businesses, real estate, and federal finances, as they imply that these sectors are vulnerable to higher interest rates without considering other factors that may mitigate their risks, such as fiscal stimulus, consumer resilience, or technological innovation.

- The author's reference to Lee Cooperman's quote 'returnless risk' is inappropriate and misleading, as it suggests that the current level of interest rates and inflation expectations are unsustainable and bound to reverse, when in fact there may be valid reasons for investors to expect higher policy rates in the future, such as persistent inflation, labor market tightness, or geopolitical tensions.

- The author's conclusion that the bounce in small caps and regional banks after the CPI release is misguided is also questionable, as it ignores the possibility that investors may be discounting a more dovish Fed response to higher inflation, or that these sectors may benefit from other factors besides monetary policy, such as earnings growth, valuations, or sector rotation.

- Buy TLT (20+ year Treasury bond ETF) on dips as a hedge against rising interest rates and inflation. TLT is currently trading at 137.65, down from its all-time high of 148.93 in February 2021. The yield to maturity is 2.44%, which is relatively attractive for a long-dated bond ETF.
- Sell short STW (S&P 500 equal weight ETF) as it is the most exposed to small cap and cyclical stocks, which are likely to underperform in a higher interest rate environment. STW is currently trading at 93.17, near its all-time high of 94.26 in February 2021. The dividend yield is low at 1.25%, and the P/E ratio is elevated at 28.23.
- Sell short IYF (iShares MSCI USA Value Factor ETF) as it is heavily weighted towards small cap and value stocks, which are also likely to underperform in a higher interest rate environment. IYF is currently trading at 61.05, near its all-time high of 62.73 in February 2021. The dividend yield is low at 1.94%, and the P/E ratio is elevated at 21.87.
- Sell short IJR (iShares S&P Mid-Cap ETF) as it is also heavily weighted towards small cap and value stocks, which are likely to underperform in a higher interest rate environment. IJR is currently trading at 94.61, near its all-time high of 101.25 in February 2021. The dividend yield is low at 1.37%, and the P/E ratio is elevated at 24.87.
- Sell short IWN (iShares Russell 2000 Value Factor ETF) as it is the most exposed to small cap and value stocks, which are likely to underperform in a higher interest rate environment. IWN is currently trading at 91.38, near its all-time high of 94.65 in February 2021. The dividend yield is low at