Tue, May 24, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Fed’s QE3 is not creating bubbles in asset classes

Tuesday, July 02, 2013

Benedicte Gravrand, Opalesque Geneva:

Robert Schumacher, Head of US Fixed Income at AXA Investment Managers, recently shared with Sona Blessing on Opalesque Radio his interpretation and analysis of the Fed’s Monetary Policy Path and its impact on the economy and asset classes.

He explains the objective of quantitative easing (QE) as "a theoretical approach to when interest rates really can’t go below zero. The concept is to provide liquidity into an economy through outright purchases of securities. But it also has another facet to it. That facet is to remove duration risk and interest rate risk from the current holders of the securities that the central banks are looking to issue. In other words, they will sell them those securities because they are ready heavy buyers for those and then take the proceeds from those sales, and perhaps reinvest those into an area of growth or other investment that is in line with what the central banks would like to see as they move the economy forward."

When the Fed announced QE, the reaction in the safest assets, such as the U.S. government securities, was a rise in interested rates, he notes. The reason why, just when the Fed was stepping in to buy those securities, is that the Fed was trying "to encourage investors to take more risk," he continues. "Therefore owning the risk-less assets does not m......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other voices: What current trends tell us about the future of the hedge fund industry[more]

    By: Don Steinbrugge, Agecroft Partners The following comments are excerpted from Agecroft Partners’ Don Steinbrugge’s presentation delivered at the 69th CFA Institute Annual Conference held on May 9th, 2016 in Montreal. In Mr. Steinbrugge’s session titled "What Current Trends Tell Us about th

  2. Investing - Steve Cohen boosted Sotheby’s stake to $86 million last quarter, Larry Robbins' hedge fund sells off all CHS, UHS hospital stocks, Tiger Global cut stakes in Amazon, JD.com, Apple last quarter, Invest in real estate near biotech hubs, Prudential’s Hyat says, Valeant: A hedge fund hotel wrecking ball[more]

    Steve Cohen boosted Sotheby’s stake to $86 million last quarter Billionaire trader and art collector Steve Cohen is on a buying spree of Sotheby’s shares. Cohen’s Point72 Asset Management acquired 1.2 million Sotheby’s shares, bringing its total to 3.2 million valued at $86.1 million at

  3. Legal - Boaz Weinstein wins round in fight with Canada’s PSP[more]

    From FT.com: Boaz Weinstein, the hedge fund manager credited with spotting JPMorgan’s “London Whale” in 2012, has won a round in a legal battle with Canada’s Public Sector Pension Investment Board that had become a test case of responsibilities when clients withdraw money. PSP sued Mr Weinstein and

  4. Regulatory - The latest Fannie and Freddie reform bill offers a bonanza for hedge funds[more]

    From WSJ.com: The latest housing finance reform bill making the rounds on Capitol Hill offers a bonanza for hedge funds seeking to cash in on their investments in Fannie Mae Mae and Freddie Mac—but the cost to taxpayers would be steep. Congressman Mick Mulvaney, the South Carolina Republican, introd

  5. West Virginia objects to Alpha Natural sale to hedge fund[more]

    From AP/Heraldcourier.com: West Virginia's environmental authority has filed an objection to the proposed $500 million sale of Alpha Natural Resources' assets to a hedge fund, arguing that the deal could leave the state holding hundreds of millions in reclamation liabilities. The Register-Hera