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Nomura Managing Director George Goncalves and LPL Financial Chief Market Strategist Jeff Kleintop on the impact of the latest Fed actions on the econo...
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I'm not saying we're on the road to -- but what does the Fed's latest move mean for your money and how you should be investing at a Fox Business exclusive with -- super Smart experts.
George -- all of -- is number is managing director and head of US rate strategy.
And we've got Jeffrey -- top LPL financial's chief.
Market strategist you guys just heard what Keith bliss said and it's true we begin to wonder where the money really is going in -- three years ago.
When the Fed's started this it -- -- bouncy castle of -- all of this money the markets did bounce they did beautifully.
Does that continue because people watching right now Jeff want to know what they should do with their money in their investments -- what they can at least expect to see.
Dell will be on the curve -- we got from the Fed today was that you know.
Do you really extend the rate guidance at all really win it all came down to it Bernanke reiterated -- still somewhere maybe around.
Middle of 2015 or at least when the employment rate begins to fall -- up with a negative.
Around the drop in the unemployment rate you know it's a great thing but -- tell me a lot closer wants.
Don't -- so why focus on I think you're right I think that as.
As people start to see the jobs numbers come back they're going to be saying wait a minute but the government trade which has been so good to my investments.
It's gonna be gone.
-- particularly he lives in areas like.
Homebuilders and it would have been a great investment probably will be a great investment for a bit longer but remember as the unemployment rate finally begins to decline if he gets -- that 7% threshold.
The Fed -- begins to stop this media begins to look at selling some of these assets as we get -- EO as we get to six and a half percent so good news becomes back.
I have news for the market.
Bad news for housing.
Which has been one of the key support for this economy over the course of this and you know what house and looking pretty good today but George let's bring you -- -- anything surprise you opt out what we saw today -- Let's of let's keep in mind and let our viewers know that tying.
What happens and how the Fed behaves to a six point any point to six point 5% unemployment rate is what Ben Bernanke said is his story has it not.
It is nothing to kind of think about it again.
The efficacy part of the equation is really critical.
The fact I think keep parents come back and doing is we're -- in this Q before and the fact that they keep coming back to more reason tells -- the -- are resolved.
But the markets are the real as extend this is good that's being put on because that we need more help and so therefore -- -- -- that is clock.
Enough to realize the obvious I mean we all know that but again that it the government traders -- meeting the Fed has pushed people into riskier assets but torch.
Are those riskier assets really giving us as much yield anymore I mean you know corporate bonds have become a very crowded trade because they -- there was some decent yield but you look now at the average double -- rated.
Corporate and you see that the yield there.
This just slightly below the S&P field so why shouldn't people go into equities or will or.
The worst risk is liquidity trap where -- where you think that well.
If I have my opportunity cost holding cash -- earning very next to nothing -- hold cash what got me that is tedious like point six at this point right.
What we have here dividend yields for triple ACC one point 85% the S&P bests them.
Look -- -- at the end of the day.
The goal is to force people out the risks spectrum in stocks with the natural habitat the question is will people really wanted to see you part with their money.
Jeff is there an unintended consequence when it comes not necessarily we talked about the six point 5% rate but.
Inflation we keep waiting for it really hasn't happened yet but and I think it's more than a year now the Warren Buffett wrote that op Ed in the New York time saying.
Watch out I don't know when it's coming but when you have this much.
Money to a system at some point and we see it today look at the dollar the dollar is tanking against the Canadian dollar it's -- dates follow and give that Euro and other major.
You'll lose your exactly right it was the last question second the last question asked about.
You know what is this doing to the dollar in and the question about that combining the chairman answered something about it we're not the only ones doing this -- They -- Japan's doing it -- -- doing it it's a race to the bottom in a competitive devaluation of currencies lately.
The make -- Japan's been winning the yen has been one -- but today the dollars down.
What may win at all that's our commodities something that holds a stable store of value as the world's currencies continue to decline maybe -- relative to each other.
But relative to stores of value such as commodities that may be the investment take away from today's meeting George you -- just saying exactly exact.
Look at the on the day we realize that the developed world over extended for many years.
And only to pay it back is through either devaluation which really can't or inflation to -- Kurdish chances to make money in my 401K.
My pension my investments -- viewers care about money and growing it.
Look at the wanna keep some sort of status of living to write a two -- if inflation's going up the stocks are going up roughly at the same speed -- breaking even the -- the goal is really about.
-- -- relative not just an absolute kind of return of chef.
