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Mesirow Financial deputy chief economist Adolfo Laurenti on monetary policy and interest rates.
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When in need meantime some bond traders may need your -- if -- say that the -- reserve decides to tighten monetary policy.
Oh you don't think it did happen.
Think again look back in 1994.
When treasuries went into a tailspin.
Following action and by then it chairman of the Fed Alan Greenspan joining us now as -- -- defense chief economist at Nazareth financial.
Adopt a good to see you I remember that this is the first year that -- -- financial writer and I remember.
What it did to the bond market -- that remember that the three David hedge funds David.
As his -- hybrid to -- -- in their hedge funds blew up and then -- -- Orange County California so why can't this happen again.
It's absolutely is that -- CBP I think they fed -- serve as being -- so far out of -- -- certain about the sup -- these economy.
Information that's not a seems to be -- -- certain.
But even we've seen the Fed that people like and they press today -- -- the cast -- CD.
Motorists are about -- making -- at the of course there tonight about the deal being in balance these.
I do believe that this not been rising that estimates he's the number one that I that that we may have to facing day.
Probably not -- the immediate future but sometimes down debt old.
Could have longer term interest rates start going up which the Federal Reserve clearly doesn't wall because of its treasury buying program.
If that starts to happen it did the market could force the Fed's hand -- it not.
Yes exactly I think that the Fed -- -- way laid that.
Land -- for the exit strategies that -- blaming is that that he sold with something that the goes wrong it may be.
Domestically may be detonation I do not forget that those that that he that he young -- less.
The Chinese that's cheating on so I think that the -- truck lead over the Fed we need to to.
Face the realities when then we let -- and we know that sometimes markets can force the hand that.
And I think that the for the Fred he's beginning the exits the refugees and.
He being a market the wave against the fixed income -- that are starting to may indeed move -- there.
Add to that to the point of one of our earlier guess Marcella -- -- said.
We don't have a deficit problem at all he doesn't believe in cutting spending right now because the economy's weak it and he doesn't believe in raising taxes but.
Again to it to your point if the market suddenly turns against this country than we do have a big problem with higher interest rates.
Michael.
They did he said he -- -- that we do not have that problem I think we duet that probably them.
May be the number seven off to skating right now.
But they think it -- easy problem of home few days to do we ever that we editing mixing Washington DC between the white -- congress.
To do these chemicals sort of being shown to but he -- some order they're not suggesting now what short term -- PC the -- the longer term they've PC spending.
And net and bit.
They've markets perceive that yet wave hitting and we are not going to be decent be -- -- -- the thinks may turn it around Beatty weekly.
So I think we need to be really care forty decent me seeing that he's good coming from -- what he's supposed he -- And then again a monetary policy cannot.
Substitute he's got -- easy indexing that the Fed would -- you really constrained that at that point to do something.
Real quick -- for a repeat of that scenario out what are the odds -- -- not gonna.
I -- I do not like the blue dog they want to GOP needs the that would just a 25%.
That we played the game is a 25%.
That think we have -- -- -- the boom.
We -- the worst.
But we needed to get a -- act to be that soon.
I'll take that 25% off I thank gave -- -- -- with Nazareth financial be well thank you.
Thank you pilots --
