/perspectives/media/consequences-of-the-feds-bill-buying-program

The Consequences of the Fed’s Bill Buying Program

From Davos, Scott Minerd, Chairman of Investments and Global CIO, stops by Bloomberg to discuss monetary policy, asset prices, and markets.

January 22, 2020

 

Key Takeaways:

  • Monetary policy operates bubble-to-bubble, in corporate America today, that bubble is in corporate credit.
  • One of the biggest mistakes asset managers make is engaging in too many tactical trades. Smart money stays the course in favor of short-term tactical moves.
  • Asset prices go up in an escalator and down in an elevator, investors should be wary of the Fed’s willingness to pump liquidity into the system
  • With excess liquidity and central banks in Europe and Asia running negative interest rates the incremental structure of yields continues to compress risk assets.


Read Global CIO Outlook: Global Central Banks Fueling a Ponzi Market


FEATURED PERSPECTIVES

June 08, 2020

The Fed’s Roadmap

The Fed has increasingly unorthodox policy options if the economy remains mired in a protracted downturn.

May 20, 2020

Reaching the End of the Runway

While the U.S. speculative-grade default rate could reach 15 percent in this cycle, the market is offering better entry points than seen in years.

May 10, 2020

We Are All Government-Sponsored Enterprises Now

The support to corporate America during this economic shutdown risks the creation of a new moral obligation for the U.S. government.


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