Poll: Will the Fed Announce Plans to Follow Through with the “Taper” of Bond Purchases?
In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked readers what outcome they expect from the upcoming Federal Reserve meeting.
Poll: Will the Federal Reserve announce plans to follow through with the “taper” of bond purchases at its next meeting September 17 and 18?
All eyes will be on Federal Reserve Chairman Ben Bernanke at the upcoming Fed meetings September 17 and 18. Since the Fed first indicated interest in “tapering” off bond purchases in May, the U.S. Treasury yield curve has shifted upward by more than 100 bps — increasing mortgage rates by a commensurate amount. The Fed’s interest in tapering appears driven by an apparent recovery in the US economy, particularly in housing. Housing prices continue to increase (up 12% annually as of July), creating hopes that the economy will move more firmly to self-sustaining growth. Nevertheless, mortgage applications are down about 50% from where they were just before the taper was announced (in response to higher mortgage rates).
Finally, the exit from the Fed’s unprecedented policy response to the financial crisis of 2008 is now being put to the test. So we asked investors if they think the Fed will follow through on the taper. Of 780 respondents, 63% expect the Fed to follow through with the taper and the remainder expect the Fed to hold out.
For more on this topic: At the CFA Institute Fixed-Income Management Conference in Boston on 17–18 October, James Grant of Grant’s Interest Rate Observer will discuss the causes and consequences of interest rates and how ZIRP, QE, and Twist are not unprecedented.
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
They must taper to stay in ratio to Treasury issuance. The reduction in front end Treasury debt will complement non existent inflation and slack credit demand. There will be a reduction of Treasury purchases to avoid additional easing but NO TAPER in mortgages.
who can apply CFA ????
what is their Eligibility………