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The Fed Is Being Held Hostage By the Market

Scott Minerd, Chairman of Investments and Global CIO, calls in to Bloomberg TV to discuss monetary policy, trade, and the implications of negative global yields.

August 13, 2019

 

Key takeaways:

  • With inflation nearing policy objectives, the Federal Reserve’s primary objective is avoiding a recession, which it is likely to do by any means necessary.
  • Central banks around the world will follow suit, and record levels of negative yields are not likely to abate.
  • The Fed is now effectively committed to cutting rates by another 50 basis points this year. The question is when.
  • If the Fed acted swiftly and communicated effectively it would reassure the market and longer term rates would rise in anticipation of increased inflation and growth.
  • The 10-year Treasury note could slip to 1.4 percent in the near term, but we expect longer rates rise later in the summer.


Read the CIO Outlook: The Fed's Sugar High

 


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