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Ariel Investments vice chairman Charlie Bobrinskoy breaks down the Fed's impact on the markets.
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And with the Federal Reserve to call set to make an announcement will just over an hour from now as a matter fact many expect some.
Kind of -- stimulus from the Fed to debate seems to be as to what kind but our first guest is.
Not so sure this morning Charles would scores the chairman and nine director of research area all a focus a fund for burial investments he's with us.
Now from Chicago we always joins us and debt it's always good to see you -- -- little bit nervous about Bernanke company delivering.
Yeah first -- all defer your viewers in homage to bad idea to make investment decisions predicting what the Fed is gonna do because everyone is trying to do that.
And it's just very well incorporated into the current stock price.
So today there are a lot of people that have been betting that Bernanke is gonna say something accommodating.
In other words -- -- gonna try to bring down interest rates in some way right and that's very dangerous it is very hard to predict and very hard to predict how the market's gonna react.
And we've been talking about what the power still is of the Central Bank particularly this one when interest rates -- zero -- Talk close to do it in you know bond yields are as low as they are meant.
And you know I know you couldn't you can twist again as they say and this operation twisted by different length.
In terms of securities and everything but what power does the Federal Reserve really have to -- -- -- stimulate do you think.
Well long term interest rates do still matter mortgage rates do still matter things like mortgages are set off of government bonds right so if the Fed did was to go and do Operation Twist and by a lot of long term.
Bonds that would drive interest rates lower and that does have some stimulus -- on the economy.
I happen to personally think it long term interest rates are very low the ten year rate being around one and a half percent.
It's hard to go much lower her and that's why I'd be nervous about making a -- Based on -- going even lower.
This also kind of interest anytime you get an environment I notice that Stewart pointed out the market isn't doing a -- today.
Ahead of the Federal Reserve but if you're a bullish equity investor in many ways -- -- For things to get worse in the economy right so that the Daniel Bernanke comes -- has to save it again.
When obviously we should all be rooting for things to get better in the economy so how -- those two things to think reconcile themselves as the year continues.
That's exactly right I'm -- so glad you said that I mean it this is -- of those conundrum is that.
Bad news on the economy makes people think that the Fed will loose sand which is good for the stock market that's just a lousy way to think about.
Things in general you we want.
The economy get better those of us who -- stocks need the economy to get better does not -- -- -- -- -- Well it lately the numbers have been mixed.
The housing numbers haven't been terrible.
The housing market seems to have bottomed.
We're still chugging along at something like 2% growth so we're not as bad as the rest of the world but it's not a great -- -- not and then that whole large -- And and that's been out there were the best of the worst to mean it's pretty bad and other places so that's not exactly something it.
Hang anybody's had -- -- Charles thank you very much for today we always appreciate it.
Charles Renee -- and -- coverage of the Fed decision it said -- the coverage at 1230 in the next hour.
Here on markets now and then Bernanke as -- quarter after 2215 eastern time of this press conference a lot coming.
