Wall Street bond traders get no reprieve from Fed’s taper plan
Federal Reserve is starting to unwind canada goose store a multi trillion dollar program that canada goose coats has propped up bond markets for nearly a decade. But ask bond traders what Canada Goose Parka the impact will be, or how they are strategizing around the canada goose black friday sale so called and Canada Goose Jackets get uk canada goose little more canadian goose jacket than a yawn. on October 12, 2016. REUTERS/Kevin Lamarque/File Photo
In interviews, trading executives at Wall Street banks said they are not expecting much to happen just because the Fed is finally Canada Goose online whittling down its Canada Goose https://www.gestiontb.ca Online balance sheet. Investors largely expected the move, and canada canada goose outlet goose uk outlet want to see other policy Canada Goose Coats On Sale changes from Washington and from central banks abroad before shifting their canada goose portfolios, they buy canada goose jacket cheap said. Canada Goose Outlet feel like they prepared.
On June 14, the Federal Reserve raised interest rates cheap canada goose uk for the third time since December, and said it canada goose uk black friday would start reducing its $4.2 trillion portfolio cheap Canada Goose of Treasury bonds, mortgage backed securities and federal agency debt that it had purchased to support markets and the broader economy.
This week, Canada Goose sale central bankers in uk canada goose outlet Europe indicated that they may start tightening monetary policy as well, offering a quick shot in the arm for bond markets.
But the process is expected to take a long time, trading executives said. The majority of assets the Fed plans to wind down are not scheduled to mature for at least five years. Europe has only begun to talk about hiking rates canada goose clearance and being less accommodative.
Instead of cheering the moves, trading executives pointed to signs that the bond market does not much care about the Fed balance sheet shrinkage, and noted that upticks in bond yields like those following comments from central bankers in England and Europe this week have not lasted long in recent years.
Volatility canada goose coats on sale remains near historic lows, canada goose uk shop as do 10 year Treasury bond yields. And the difference between short term and long term interest rates has narrowed, suggesting there are concerns about the long term health of the economy.
At recent industry conferences, senior bank executives have told analysts and investors to expect declines of 10 to 15 percent in trading revenue when they report second quarter results next month, due in large part to weak buy canada goose jacket bond market activity. Stock analysts have been issuing gloomier forecasts for similar reasons.
into the slower part of the year, we still see some value, but the group has its work cut out for it to justify estimates, Evercore ISI analyst Glenn Schorr wrote canada goose clearance sale about the Wall Street banks he covers in a Wednesday report cutting profit forecasts.
The latest troubles come on top of a 51 percent decline in annual bond trading revenue across Wall Street since 2009, according to research firm canada goose factory sale Coalition.
market was betting on (growth) heavily going into 2017 and in the meantime oil has declined and inflation has declined, he said. almost as of the market wants to see it before it prices it in.
Reporting by Olivia Oran; Additional reporting by Dan Freed; Writing by Lauren Tara LaCapra; Editing by Chizu Nomiyama.