John Bellows is a portfolio manager of two five star bond funds at Western Asset Management.
Thursday on CNBC's "Power Lunch' he explained why the Federal Reserve is bound to raise rates this December.
"We expect a Fed hike next month, followed by a very slow and gradual pace of subsequent hikes in 2016," said Bellows. "The Fed does not want to tighten financial conditions or slow economic growth. Instead they are looking to move away from emergency policy towards something more normal."
So why would the Fed want to stop the recovery, especially when it is so fragile?
"It's important to distinguish a hike from the Fed becoming hawkish," said Bellows. "In general, the Fed wants to keep supporting markets and the economy and won't do anything that would be damaging for either."
Then why even hike this year? If the outlook doesn't demand it, why not just stay at zero?
"The tension is that while the outlook does not demand a sharp tightening of monetary policy, it is also true that the outlook does not warrant an emergency policy of zero interest rates," said Bellows. "Thus, the Fed's challenge is to somehow move away from the emergency policy, while not doing any damage to the recovery."
Bellows is currently loading up on high yield energy bonds, with an emphasis on companies able to withstand a prolonged period of low oil prices.
"We think Sanchez Energy's high yield bonds at 12 percent offers very substantial yields for long-term value-oriented investors," said Bellows.
Western Asset Management was named Morningstar's Fixed-Income Manager of the Year for 2014. Their main fund is the five-star ranked Western Asset Core Bond Fund. Total returns averaged 7.54 percent over a one year period and 12.25 percent over the past five years.
CNBC's Karen Stern contributed to this article
