Thelatter half of the first quarter offered some respite for equity markets,American Capital AgencyCorp. executives said April 26, but the key theme remainsuncertainty around the Federal Reserve's interest rate policy.

Speakingduring a conference call to discuss quarterly , President, CEO and ChiefInvestment Officer Gary Kain reiterated that "lower for longer" will continueto define the overall rate environment. Over the nearterm, however, Kain expects another rate increase — failing a significant shockto the system such as surprising economic numbers or deterioration in financialconditions.

"Overthe course of the year, we're likely to see some of those shocks coming intoplay, and that might be the last time they go," he said, referring to aFed decision to raise rates.

TheU.K.'s potential departure from the European Union, a move British voters willdecide on in June, could create the conditions for such a shock. "It wouldobviously be a significant event, and to be honest, I don't know how the marketwould react," Chief Risk Officer Peter Federico said in response to ananalyst's question about the country's possible exit.

Otherglobal concerns have led investors to expect that the Fed will not be able tostick to its plans for slowly increasing rates, Kain added. "The jury'sstill out on China," he said.