Jump to navigation

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Futures          
       
more >>

We Asked Traders

We asked traders for their opinion on the launch of bitcoin futures

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

Energy demand steps back in play
Advertisement
more Volatility>>

Volatility

Volatility & opportunity in the energy sector
more Financials>>

Financials

Daily Price Action: E-mini S&P 500
more Options>>

Options

Trading Vertical Option Spreads

Advertisement

Fed may shift talks toward more monetary stimulus, El-Erian says

By Susanne Walker, Bloomberg

April 29, 2013 • Reprints

Federal Reserve policy makers may shift discussion away from when to reduce monetary stimulus, given data showing the economy is weakening, according to Pacific Investment Management Co.’s Mohamed A. El-Erian.

“The inherent momentum of the economy is still weak and you don’t want to taper off too quickly,” El-Erian said, speaking in a Bloomberg Television interview with Willow Bay at the Milken Global Conference in Los Angeles. “They are going to try to change the narrative away from the Fed is taking its foot off the accelerator, to the Fed is maintaining its foot on the accelerator. It could even press it harder.”

The Fed is buying $85 billion of Treasury and mortgage debt a month to support the economy by putting downward pressure on borrowing costs. The central bank spent $2.3 trillion on Treasury and mortgage-related debt from 2008 to 2011 in the first two rounds of its policy known as quantitative easing.

Gross domestic product rose at a 2.5% annual rate in the first quarter, below the 3% median estimate of economists surveyed by Bloomberg, Commerce Department figures showed on April 26.

The policy-making Federal Open Market Committee, which concludes a two-day meeting May 1, is forecast to keep its interest-rate target at zero to 0.25% and continue its bond-buying.

Market Timing

At their meeting last month, several members of the Federal Open Market Committee advocated slowing purchases and stopping them by year-end. Since then, seven have voiced support for maintaining the current pace, including five who vote on the policy making panel: Governor Daniel Tarullo, New York Fed President William Dudley, James Bullard of St. Louis, Chicago’s Charles Evans and Boston’s Eric Rosengren.

El-Erian also noted the risks in the record amount of stimulus injected in the economy.

“The benefits of the Fed come with costs and risks,” he said. “What I worry about is when you run a system at artificial price levels, you start creating damage, resources are misallocated, too much risk is taken.”

Europe’s crisis remains a barrier to growth, El Erian said, noting efforts by the so-called troika -- the International Monetary Fund, the European Commission and the European Central Bank.

“The troika is having difficulty coordinating, there’s enormous creditor fatigue, there’s debtor fatigue and there are few growth models,” he said. “The economic situation continues to be worrisome. Europe needs to recognize that growth is the major issue and without growth everything else that they are doing is not going to pay off.”

Newport Beach, California-based Pimco’s Total Return Fund has returned 7.7% in the past year, beating 92% of its peers, according to data compiled by Bloomberg. It gained 1.3% during the past month, outperforming 79%.

Bloomberg News

About the Author

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Related Articles
Daily Price Action: E-mini S&P 500
GBP/USD drops as weak CPI reduces BoE May rate rise odds
Daily Price Action: E-mini S&P 500
Daily Price Action: E-mini S&P 500
Daily Price Action: E-mini S&P 500
Previous
Treasury 10-year yield at almost 2013 low as U.S. spending slows
Next
Hedge fund to pay $21.5 million to settle SEC charges
Related Terms
US Federal Reserve 8527bank 6455fed 3336European Central Bank 3208financials 2975International Monetary Fund 1712Economy 1513California 1387Federal Reserve 1207Department of Commerce 838Federal Open Market Committee 773Qe 751European Commission 483Bloomberg Television 360policy makers 323QUANTITATIVE EASING 257New York Fed 209James Bullard 190Gross domestic product 184Pacific Investment Management Co. 164Charles Evans 121PIMCO 65William Dudley 65Eric Rosengren 64Total Return Fund 39Daniel Tarullo 30Mohamed A. El-Erian 1

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images