Sun, Sep 25, 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. Star names struggle as smaller hedge funds make hay[more]

    From eFinancialnews.com: Many big-name funds have been hit by sharp reversals in markets, including US government bonds and UK stocks, and have struggled to extricate themselves from positions that have gone bad. According to data group eVestment, hedge funds below $250 million in size are up 4.1% t

  2. North America - Acela fight splits hedge fund Connecticut and old money enclaves[more]

    From Bloomberg.com: Connecticut’s residential coastline is two worlds, the one of newcomer millionaires and one whose wealth and New England roots span generations. Now, their differences over a rail route threaten to gum up plans for the U.S. Northeast’s fastest-ever trains. About 30 miles from Man

  3. Activist News - Caesars offers creditors another $1.6bn, would spell end of hedge fund ownership, Activist investors double chance of CEO exits[more]

    Caesars offers creditors another $1.6bn, would spell end of hedge fund ownership From Calvinayre.com: Casino operator Caesars Entertainment has improved its offer to junior creditors to over $5b, but the offer is only good until Friday. On Wednesday, Caesars added an extra $1.6b to the $

  4. Comment - ‘Gut feeling’ measurable in hedge fund traders, How hedge fund managers can use blockchain to maximize benefits[more]

    ‘Gut feeling’ measurable in hedge fund traders From Laboratoryequipment.com: “Gut feeling” is an intangible – an automatic hunch – based on prior experience for some people. But the “gut feeling” is actually a measurable response developed in professionals doing some high-risk work, acco

  5. Opalesque Exclusive: Modern investor tools (2): A platform that does the job for you[more]

    Benedicte Gravrand, Opalesque Geneva: A new series on technology providers that assist asset allocators. There is disruption in the investor part of the world of hedge funds, coming from platforms that can replace traditionally-run search and analysis. Here is one of them. L