FOMC Participants Central Tendency of PCE inflation @ Year-End 2013-5, LR 1.22% 1.68% 1.88% 2.00% change -0.33% -0.07% -0.05% 0.00%
Bernanke gives an odd answer to Nikkei reporter, particularly given the Fed’s adoption of failed Japanese economic & monetary policies $$
Yeah, weird answer. RT @Matthew_C_Klein: “Volatility is linked to the BOJ’s efforts. Seems logical.” Um…
BB shows his ignorance on the topic of money market funds, a floating NAV will destabilize, and lead to runs on funds
FOMC Participants Central Tendency Unemployment Rate @ Year-End 2013-5, LR 7.23% 6.60% 6.02% 5.57% Change -0.12% -0.17% -0.19% 0.00% $$
FOMC Participants Central Tendency Change in GDP @ Year-End 2013-5, LR 2.40% 3.14% 3.19% 2.43% Change -0.13% -0.03% -0.07% 0.00% $$
BB, markets do not care about the past, they care about the future. Stock levels of bonds r the past, future behavior affects markets now $$
FOMC Participants Target Federal Funds Rate at Year-End 2013-5, LR 0.26% 0.58% 1.78% 4.01% Change from prior -0.03% 0.03% 0.47% 0.00% $$
Overview of FOMC participants’ Appropriate Timing of Policy Firming central tendency shrinks by 2 months to 2.3 years
Bernanke questioned on MBS holdings, denies that the Fed is having a big effect on the market. If so, why buy there for policy reasons? $$
BB is confused think that holding securities will keep rates low; yields react to changes in expectations of future actions $$
Cutting off asset purchases at 7% unemployment further clouds the market view of Fed policy; the Fed is far more flexible than that. $$
BB also refuses to talk about his future at the FOMC, after being asked by a Washington Post reporter. $$
Bad question from Bloomberg reporter suggesting that the unemployment trigger should be lower. BB gives no much of an answer. $$
Good question on the rise in real rates from the FT reporter. BB says that he doesn’t get why that happened. $$
Question on long term interest rates — BB says that is is an improving economy. Points to housing again (the dead cat bounce) $$
Hilsenrath asks a decent question on punk economic growth. BB responds with housing and State govs & 2 small of a deficit (!) $$ #pleasego
About David Merkel
David J. Merkel, CFA, FSA, is a leading commentator at the excellent investment website RealMoney.com. Back in 2003, after several years of correspondence, James Cramer invited David to write for the site, and write he does — on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, and more. His specialty is looking at the interlinkages in the markets in order to understand individual markets better.
David is also presently a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. He also manages the internal profit sharing and charitable endowment monies of the firm.
Prior to joining Hovde in 2003, Merkel managed corporate bonds for Dwight Asset Management. In 1998, he joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life.
His background as a life actuary has given David a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that David will deal with in this blog.
Merkel holds bachelor’s and master’s degrees from Johns Hopkins University. In his spare time, he takes care of his eight children with his wonderful wife Ruth. View all posts by David Merkel →