Bond Strategists Look to Fed Minutes Wednesday -- Barron's Blog

        By Amey Stone
        Even though the Fed met three weeks ago, the bond market event of the day Wednesday will be the release of the minutes of the Federal Open Market Committee's April 28 and 29 meetings.
        Edward Acton of RBS' Trading Desk believes the Fed's discussion of the job market could have impact. He wrote Tuesday:
        Although the minutes ought to be rather vague given the limited nature of data inputs, any upgrade of language on the labor market or downgrade of growth, the reversal of the March statement's views, could influence front-end pricing.
        Thomas Simons of Jefferies will be watching discussion about the transitory nature of economic weakness in the first quarter. He wrote Tuesday:
        In the Minutes to the meeting, we expect there will be a debate over just how much of the economic weakness is attributable to these transitory factors as opposed to a breakdown in fundamentals.
        Tom Kersting, fixed-income strategist at Edward Jones, told Barron's that although he'll be scrutinizing the Fed minutes for hints about liftoff timing along with everyone else, he doesn't expect to see anything that significant:
        We know the Fed is going to begin to tighten fairly soon. What we tell clients is, let's not wait. Let's position your portfolio today for that environment we know is coming so we will be ready when it happens.
        He suggests investors create a ladder of short-term and intermediate bonds. That way they can have some current yield, but will be able to roll over the short-term notes into higher yielding bonds as rates rise.
        (END) Dow Jones Newswires

        May 19, 2015 17:17 ET (21:17 GMT)

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