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How Long Can Stimulus Last?

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  • Description

    Cumberland Advisors chief monetary economist Robert Eisenbeis gives his outlook for the Fed.

  • Duration 3:36
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The better than renounced his -- at the top of the hour 2 PM eastern and well my next guest isn't expecting any policy change Bob -- and -- says.

We may get some new insight into how long fed chief Ben Bernanke can keep pumping money into the economy.

Mr.

-- -- this is the chief monetary economist Cumberland advisors and formally from the Atlanta fed and the US Federal Reserve thank you so much for joining us there.

My pleasure.

Expecting any surprises from burning -- company this afternoon.

Well not in terms of policy I don't expect any change in.

-- they'll keep interest rates low at the present levels I think for some period of time yet.

Made even more likely by the events in Europe and Cyprus.

Where I would be very interested in however is what if anything in terms changes -- gonna make in there exit strategy.

They didn't visit that issue and the last time not until June of 2011.

And since then they haven't -- -- strategy.

But they've been doing some hints.

Through speeches -- everything that they may not engage an asset sales and that would be a big deal.

So we know since the last fed events big event we've had an improvement in job creation improving retail sales -- we've also had headwinds as Peter Barnes.

Put it specifically with Cyprus as we continue to get -- out of the region the country today.

So how I think it will all net out I mean do you think it will encouraged.

This fed chief to actually give us some more insight into how he plans to initiate this exit strategy what he thinks the market reaction would -- to that.

I think I think that's a logical question for the people to press conference to pursue with them since he mentioned in this testimony before congress.

That that was something that they were going to be looking -- so I think that's going to be.

One of those questions that even if he doesn't raise it the press corps will raise it with -- so.

I'm confident that -- that they've been looking at this issue.

The Fed Funds futures are putting June 2015.

As that time -- now markets investors players if you will do expect interest rates the Fed finally raise rates.

-- -- What do you think you grew -- unemployment will we see six point 5% at that time.

The Fed's target.

I think that that it really is gonna depend upon what the job growth it is and if you have about 2101000.

Jobs per month.

That's from now until that period of time you're looking at.

The best possible case would be sometime in early 2014.

But I don't think that's very likely and I think that.

Time period 2015.

Is probably right now a best -- -- on everybody's part including the markets.

What's your opinion on how Bernanke's conducted monetary policy up through now.

Well it's been desperate that has been aggressive.

He's not been afraid to pursue.

New ideas and new alternatives.

My real worry is what the exit strategy is going to be and what the consequences of all of this expansion.

Particularly the blowing up of the Fed's balance sheet is going to be and how they're gonna get out of that.

Yet rates are up a little bit here ahead of the announcement would he think the message and that is.

Well I think that part of that's due to uncertainty about.

What's happened in in Europe then and a lot of other things.

Rates have been moving around a lot of things cause.

Longer term rates to move.

-- -- so but I don't think it's related to.

The interest rate decisions that the Fed is gonna make -- and announcing today.

All right appreciate your take your insight -- now says Bob -- -- many thanks.

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