Fundsters and other asset managers are worried about rising interest rates, and they're telling the Fed.

The just-released minutes of last month's Investor Advisory Committee on Financial Markets, which includes Mary Callahan-Erdoes of J.P. Morgan Asset Management [profile] and Rick Rieder of BlackRock [profile], reveal that the asset managers on the committee told New York Federal Reserve President William Dudley that, if interest rates start to rise, retail bond fund investors will take a beating.

"Uncertainty was expressed as to the potential market functioning impacts of large outflows from corporate credit-related mutual funds and ETFs, especially as retail holdings of corporate bonds have increased relative to market volumes and broker-dealer balances have decreased," the minutes read.

Jennifer Ablan and Jonathan Spicer of Reuters covered the meeting minutes. 

Edited by: Neil Anderson, Managing Editor


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE