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发表于 2010-8-12 09:31 AM
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An argument for the bulls ...
From Bloomberg ...
Fed Decision Will Eventually Buoy Risk, Pimco’s Crescenzi Says
By Mary Childs and Betty Liu
Aug. 12 (Bloomberg) -- The Federal Reserve’s decision to reinvest principal payments on mortgage holdings into Treasuries should eventually boost demand for riskier assets, according to Anthony Crescenzi of Pacific Investment Management Co.
The central bank’s reduction of its target lending rate to virtually zero in 2008 didn’t have an immediate reaction either, said Crescenzi, a strategist at Newport Beach, California-based Pimco, in an interview on Bloomberg Television’s “In the Loop” program. The Standard & Poor’s 500 Index dropped as much as 1.2 percent today to its lowest intraday level since July 22.
“It took until March 2009 until it was risk-on,” said Crescenzi, whose company manages the world’s largest bond fund. “It was many months. The Fed will hope that this is a short- term reaction, that the effects of its actions, which is the purchase of securities, and the impact it has on interest rates will in fact push investors to move out the risk spectrum.”
The yield on the 10-year Treasury note dropped yesterday to 2.6797 percent, the lowest since April 2009. The two-year note’s yield tumbled yesterday to 0.4892 percent, the all-time low.
The benchmark note isn’t overpriced when viewed in the context of the fed funds rate at 0.2 percent and the annual core inflation rate of 0.9 percent, Crescenzi said.
The Fed reversed plans on Aug. 10 to exit from aggressive monetary stimulus and decided to keep its bond holdings level to support an economic recovery that it described as weaker than earlier anticipated.
Central bankers adopted a $2.05 trillion floor for their securities portfolio, pivoting toward a quantitative target for monetary policy.
The Fed bought $300 billion of Treasuries from March to October 2009 to bring down borrowing costs. It has kept its target lending rate in a range of zero to 0.25 percent since December 2008. |
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狗仔卡
发表于 2010-8-12 09:28 AM
