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Banyan Partners chief market strategist Robert Pavlik and UBS chief economist Maury Harris on how the Fed's decision will impact the markets.
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Fifteen minutes -- -- just.
While literally minutes away from chairman Bernanke's news conference where he'll face questions on the Fed's -- -- -- stimulus program lots of questions for the Fed Chairman would joining us now to weigh in on all of this is.
Bob -- like -- would by the -- partners chief market strategist and Maury Harris chief economist for the Americas at UBS let's begin -- review and just -- get your reaction.
Well.
You certainly have my -- my question too is will this do any good we've seen perhaps some of the numbers weak recently been -- all they.
Back weeks two justify this level of monetary easing.
I have to say yes amended and as a dual mandate one of the mandate requirements is -- trying to provide full employment.
And you get fed is going to try to willow approached that mandate trying to sort of satisfy that mandate by lowering interest rates especially with -- -- the housing market.
That's a positive.
It eventually it will or they the idea is that it will eventually encourage people to -- -- them try to seek a new mortgage and hopefully help rebound.
What we're seeing in the housing market and eventually the items that go along with a housing market.
Will it actually happened that's a question that has yet to be seen I mean this is a there has -- big question mark behind it.
But really what it's doing is it's removing some uncertainty from the overall market and that's a positive.
-- at and I acknowledged -- been for mortgages it these days that rates as low as they are what did you think of what Ben Bernanke announced today do you agree with that -- Well I think this was very clever way to expand -- balance sheet in what I would call a politically correct fashion.
That there's the Fed has been accused of monetizing Obama's deficit.
Well this is a way to get around that you've found mortgages you don't but treasuries when their days -- over -- you're still pumping more liquidity into the banking system.
When the day's over they're buying an asset when they -- and cash like treasury to a marketeers.
That's gonna help other asset prices and ultimately that's one of the major combatants -- -- monetary policy in the economy.
It's improved asset prices including an improvement in the stock.
Market Bob let -- up pick up on that yes we're pumping liquidity into certainly the banking system to the banks not really passing this on all they are you surprised that the Fed.
Hasn't taken a step -- perhaps charging banks department cash -- overnight in an effort to get them to push that money back out to where it could really get the economy going.
Yeah I was quite surprised in fact when you are wrote my notes -- the producer that was one of the the things I was hoping to see you know -- if you give the the banks an incentive to actually allow make loans to people that would be you -- huge positive for the overall market.
You know we are seeing some improvement in the large number of loans that are being made.
But I think you have to continue to encourage that.
Now you're you're doing that sort of in a -- that manner Europe you're going to be buying these mortgage backed securities essentially from the banks from the market that's going to be pumping more money into the banks and hopefully.
-- pumping more money into the to the overall marketplace and that will encourage.
You know additional loans going forward.
I know labour at a time accident we're gonna it would take a break -- and we'll come back and pick up the argument you wanna jump in I if it haven't haven't yet.
Hello -- now generally stick around -- will be.
