Sun, Jan 22, 2017
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. Investing - This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally, Hedge fund legend David Einhorn is making a big bet on GM, After impressive 85% return in 2016, hedge fund looks to Canadian gold producer, small banks[more]

    This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally From Forbes.com: Can bank stocks continue to rise after a 28% surge in the KBW Bank Index in 2016, fueled by a post-election rally as stock pickers returned to the beaten down sector? Forget the s

  2. SWFs - China sovereign wealth fund CIC plans more U.S. investments[more]

    From Reuters.com: China Investment Corporation (CIC), the country's sovereign wealth fund, is looking to raise alternative investments in the United States due to low returns in public markets, its chairman said on Monday. CIC will boost its investments in private equity and hedge funds as wel

  3. Some hedge funds strong start in 2017 nice contrast to 2016[more]

    With the 2016 HSBC Hedge Weekly performance rankings in the books - a year in which the same leader-board entries pretty much dominated unchallenged throughout the year - comes a new leader board that is a hard-scrabble mix of hedge fund styles and categories. What is clear after but a few short wee

  4. Macro hedge funds and CTAs outperform in December on strong dollar[more]

    Komfie Manalo, Opalesque Asia: The last month of 2016 saw risk assets climbing higher, as part of expectations that the new U.S. administration will remove barriers to growth and investment, Lyxor Asset Management said. December also saw the Fed hik

  5. Opalesque Exclusive: Roxbury credit events UCITS gathers more assets[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The Roxbury Credit Events Fund, launched in September 2015, was up 4.24% in 2016, having returned seven positive months during the year. The managers raised