Also in this playlist...
This transcript is automatically generated
Hey this -- and he is the head of black rocks municipal bonds greatness is a 114 billion dollars and that says hey Peter good to see it.
I get looks -- this question how long can the Federal Reserve sustain this level of bond buying.
That's what the market's trying to figure out and I think perhaps if you look back to.
The Fed chairman's testimony last month before congress the market may read too much into his statements I don't think the Fed really goes to be honest -- -- -- I think they're very reactive to economic data and economic growth in the US is still.
Somewhere between one and 2% which while positive.
It's really not that strong they have two targets one is around employment -- there is inflation.
Inflation -- has actually been coming down.
So I don't think that they really knows they're -- to be react -- the Fed data that's probably what we hear today they're going to be flexible in their approach.
And they don't really know many months out.
What the pace of employment creation will be what inflation will look like but I think they need to talk about it we're in an error of a more -- -- more transparent fed.
They've taken that essence and certainly very unprecedented action here with the amount.
And scope of Q we over the last several years so the exit is on president as well it's -- to begin talking about it but the market I think have to be careful about over reacting -- here.
We know this with 100% certainty admitted this bond buying will not last forever.
And when the Fed signals that it's going to be pulling back on it will it be ugly for all classes of fixed -- com.
-- that that's a good question and you had a good point because I think the markets would like QE forever but obviously they're not gonna get it.
At some point it needs to -- and even tapering is still accommodative by most measures they're still adding stimulus to the economy.
Even if they go from 85 to some number will -- that.
But nonetheless at some point -- -- it does have to and I think the point is they can't just walk in one day and and ended they need to talk about it they need to.
Preempt the markets and have the markets digest that information for what it means because if they don't.
That I think it is negative for most fixed income for most fix things politically most any cover risk assets in general.
So by filtering in this stuff having this dialogue filtering -- information over time.
They they give the markets a little bit time to digest and become perhaps less volatile which I think ultimately it's their hope.
Speaking of negative at looking at every single class.
How did they held up.
Verses treasury certainly better than the longer term US government bonds but -- -- Do you see them as being a haven if you will vs treasuries in the months to come.
-- the most the -- I think uses of both the key question here.
We were entering a period where demand is very strong a lot of bonds come out of the market there's a lot of money to reinvest.
Supply -- -- so we think going forward.
They will outperform but over the last six weeks they've actually underperformed.
Because we've had too much supplies not enough the man.
But typically when markets overshoot and become volatile it's often a good opportunity to good entry point.
For investors to put some money to work right and had state -- look incredibly -- -- They do guys save big general improvement over the last several years we have nine states today there are expected to actually.
Post surpluses for this fiscal year 45 states have actually.
Met or exceeded their revenue projections so.
Definitely helping other revenue sides.
Constrained on the spending side and that's lead to better overall fundamental credit in the -- market.
We hope to see again very sand -- thanks so much for being here today Peter how is that black rock with you rather -- even more brought.
Filter by section