The unwinding of the Federal Reserve’s bond purchase program, and the gradual improvement of the US labor market, will result in a hike in interest rates, possibly by the spring of 2015 as mentioned by Fed chairwoman Janet Yellen after the last FOMC meet. Anticipating the shift, many investors are steering clear of long-duration US Treasuries and corporate bonds, but …
New ETFs On The Block: Horizons S&P Financial Select Sector Covered Call ETF (HFIN)
Ahead of next week’s FOMC meeting, there has been much speculation of a small taper by the US Fed, although markets seem to finally accept that a rate hike won’t happen until 2016. The recent bipartisan deal to avoid a future government shutdown has only strengthened this argument. But this doesn’t bode well for the financial sector which had benefited …
One Man’s Opinion: Could The Fed Increase Asset Purchases To Bring Down Yields?
Following the release of the Fed’s latest FOMC minutes, the bond markets have witnessed violent movements with prices plummeting and yields shooting up. People have pressed the panic button a little too early and may have jumped too far, feels David Blanchflower, economics professor at the Dartmouth College and a former policy maker at the Bank of England. If the …
Bears Feast On Fed’s News
[Chart courtesy of MarketWatch.com] Concluding the Federal Open Market Committee’s (FOMC) monetary policy 2-day meeting, Federal Reserve Chairman Ben Bernanke held a press conference and appeared to have hinted that the days of easing may be nearing an end. The statement from the FOMC was released ahead of the press conference wherein the Fed left the target fed funds rate …
One Man’s Opinion: Was Bernanke’s Congressional Testimony More Of The Same?
Markets reacted sharply earlier this week after Federal Reserve Chairman Ben Bernanke’s latest Congressional testimony revealed the central bank discussed starting to taper its bond purchase program at the latest FOMC meeting. But Heather Loomis, executive director of fixed income at JP Morgan Private Bank, feels Bernanke’s statement was very balanced, and the volatile reaction from the bond and the …
One Man’s Opinion: Will The Fed Continue To Buy $85 Billion A Month In Assets Through 2013?
The US Federal Reserve will continue with its $85 billion-a-month assets purchase-program at least till the third quarter of 2013, feels Neil Datta, the Head of US Economics at Renaissance Macro Research. Given the Fed’s propensity to air on the side of caution, the likelihood is that they keep buying into early 2014, he noted. The Fed made it clear …