In this fascinating study of the Federal Reserve System, Peter Conti-Brown shows that much of what investors know about the formulation and implementation of US monetary policy is wrong. He also demonstrates that much of the expert commentary in the media (e.g., regarding future interest rate actions) proceeds from false premises about the central bank’s internal dynamics. Although practitioners should not accept all of Conti-Brown’s conclusions uncritically, they can assuredly profit from his debunking of conventional wisdom about a key driver of the financial markets.
Think about the markets since the financial crisis. What has defined the era? Two words: monetary policy. Central banks — more than economic growth or any other factor — are what have moved the markets. But that may be changing.
How can investors cope with the extraordinary, post-Great Recession policies of central banks? PIMCO's Marc P. Seidner, CFA, offered direct and logical prescriptions at the CFA Institute Fixed-Income Management conference.
Like modern-day Drs. Frankenstein, central bankers are trying to artificially create life in the financial system. They have embraced extraordinary monetary policies to create economic growth where none would exist. And someday soon, the monsters they are experimenting with may wake up and break out, Ron Rimkus, CFA, explains.
Monetary policy, lagging economic growth, aging populations in the leading global economies — what is the biggest challenge confronting investors on today's fixed-income obstacle course? We polled readers of CFA Institute Financial NewsBrief to find out.
Every player in fixed income hangs on the doings of Janet Yellen and Mario Draghi like teenagers with Taylor Swift and Justin Bieber. The focus is all on exogenous factors, says Jason Voss, CFA. What is not being accounted for? Endogenous criteria like the quality of the business models of the credits or whether a portfolio is diversified enough.
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