Federal Reserve tightening, interest rate increase fears are unfounded - Business Insider

  • 📰 BusinessInsider
  • ⏱ Reading Time:
  • 57 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 26%
  • Publisher: 51%

대한민국 뉴스 뉴스

Opinion | Don't buy into fears that the Federal Reserve is about to make a sudden change to their support for the economy. By Neil Dutta of RenMacLLC.

There's been noise that the Federal Reserve may suddenly start tightening policy or move towards raising interest rates.So everyone calm down.This is an opinion column. The thoughts expressed are those of the author.With the US economy poised to come out of the COVID hit in a strong position, the economic worriers are exhuming an old boogeyman to pin their doom and gloom on: the Federal Reserve.

At the first sign of economic improvement, bond markets would assume the Fed was ready to move against potential inflation with decreased bond purchases and higher rates. As the Fed pushed back on the idea of less economic support, markets eventually caught on. For investors, this dynamic creates trading opportunities in the front end of the yield curve. Markets shoot first and ask questions later. The Fed tends to ask questions first.

2013's "taper-tantrum" — the investor freak out over whether the Fed was going to decrease the amount of bonds it was buying and potentially raise interest rates — was sparked by comments from then-Chairman Ben Bernanke – straight from the horse's mouth. Today, the "taper-talk" so far has been fueled by a number of

At the time, most investors assumed that the Fed's bond buying and interest rate hikes were closely linked. Thus, when Bernanke suggested slowing bond purchases in May 2013, the fixed income markets assumed an increase in policy rates was just around the corner. The two-year yield started shooting up, as an example.

 

귀하의 의견에 감사드립니다. 귀하의 의견은 검토 후 게시됩니다.
이 소식을 빠르게 읽을 수 있도록 요약했습니다. 뉴스에 관심이 있으시면 여기에서 전문을 읽으실 수 있습니다. 더 많은 것을 읽으십시오:

 /  🏆 729. in KR

대한민국 최근 뉴스, 대한민국 헤드 라인