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Well -- -- and counting we are just ninety minutes away from the Fed's latest policy statement there is a treasure troubled mixed opinion as to what the Fed's gonna scale back its.
Bond buying program AEI scholar and former Federal Reserve economist Kevin -- Hate -- like -- senior economist at the Cleveland but here Kevin let me start with you okay we've had.
Cancer and other fed officials at ten maybe twenty billion could be taken off the table what do you -- Yeah I think that at some point between now the end of the year that is going to happen.
But what I'm expecting today is that the Fed is actually going to be pretty dovish and kind of back off all the speculation about tapering.
You know I really started back on May 22 -- a hearing of the joint economic committee where Kevin Brady of Texas kinda.
Got Bernanke and his cross hairs and maybe got him to say some things that he didn't intend to say and that's what spooked markets as I think today they're gonna try to restore order with some pretty dovish language.
You know Jeffrey I was looking at -- op -- by Darby B economists of course you know very well in -- from Eurasia group but they called this a G zero world.
There are very critical -- not the Fed's policies but the bit that negative effects on.
China's economy for example of the -- -- another meltdown gonna come in Europe's of their very negative about the overall -- can economic picture for the world do you agree with that assessment.
Well what I would say is from investor perspective.
We don't think -- we is boosting the real economy.
But he is having huge effects on capital flows.
Both in the US and outside the US I think if you imagine a -- Now is one of the world's biggest bond portfolios they're gonna have.
You know maybe four trillion.
That displaces investors that means investors have to go elsewhere.
To find securities they go into to other sectors of the credit markets and then on a global basis so the Fed's policies.
Whether we like it or not are having these ramifications globally.
They are you know haven't let -- about the statement because we're gonna get in -- statement first.
That there could be potentially a language change do you think we're gonna get it and if so do you think it would -- about how saying.
Employment where do you think that they can actually change the language today.
What what everybody's looking at is what are they gonna say about unemployment because what Bernanke has said.
Is that a tapering might -- damned if they -- confident that there's a sustained incident and sustained is the important word reduction in unemployment.
I don't think they're gone anywhere near that today but that's what everybody is going to be looking for Justin questioned -- -- I think there.
-- that the real wild called -- Cheryl is inflation do they mention the recent.
Disinflation trend to receive virtually across the world but especially in US core inflation gauges.
Did -- that they view it as a temporary edit an aberration if you will or is it something more worrisome that's the wild card that I'm looking for.
And the statement also from mr.
Bernanke post meeting.
All right Kevin Jeffery you have to ask this next question you know this was coming Kevin do you think we get any hints about mr.
Bernanke's future as Fed Chairman we heard the president make what seem like a Freudian slip up.
That he sit on the job longer they met Syrian and wanted to what do you think happened.
Yet and there are a lot of slips going -- we also -- this one where may be Bernanke said he wasn't going to the Jackson Hole meeting this summer which might have even suggested he'd be -- by the end of the summer.
I think -- nobody expects him to be reappointed he'll be done by the end of this year.
And the only question is is he gonna go sooner than that -- and my guess is that that he's probably gonna stick around.
Towards the end of the year because he wants to start the tapering himself.
Rather than leave that to the next person.
Sharon happened Jeff are you could also bring in Janet Yellen what's at this point is the odds on favorite I mean yes we've heard the name Tim Geithner and Larry Summers up front about that at the same time.
Really he could do that and have her cut -- run the party if you well.
I think the key innovation of the Bernanke fed is it's more than just one person -- -- there is a framework in place.
There's a broad consensus all the policies that are being.
Implemented and that will exist what whether he stays or whether he goes that's the most important thing relative to the previous.
You know while some of the the names of potential lives actually Greenspan I -- you well.
We have now we're financing gadget remember gonna find out what is happening -- an asset and typically -- Donna thank yet.
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