Connect with us

Bernanke’s Final News Conference – Taper Down

Published

on

bernanke_final
The key thing to remember is that quantitative easing is not ending, it’s barely being reduced. Starting in January, the Federal Reserve will taper QE to a US$ 75 billion pace. Essentially, instead of US$ 40 billion of asset purchases in mortgage-backed securities, the Fed will purchase US$ 35 billion per month. Instead of purchasing US$ 45 billion longer-term Treasury securities, the Fed will purchase US$ 40 billion per month.

Capital markets are happy with Bernanke’s taper announcement; the Dow Jones Industrial Average shot up nearly 1% within 20 minutes of the Federal Open Market Committee’s statement being released. Federal Reserve Chairman Bernanke made it clear that Yellen’s ascension had no bearing on timing of the call to taper.

When questioned on whether the Fed would use other types of means for economic stimulation, Bernanke tiptoed around the idea of favorable discount window rates to banks that could prove they were loaning money to small businesses and households. But he mostly dismissed the idea stating that he feels that tight credit is not the U.S. economy’s main problem.

The FOMC did not modify its forward guidance. The threshold of the unemployment rate for a first rate hike is well below 6.5%. However, Bernanke noted that he will not hike rates merely because unemployment hits this threshold. He wanted to stress that the federal funds rate will remain near zero “well past” this threshold. Once the target is reached, Bernanke suggested that the Fed will look more closely at other types of employment figures, notably the labor force participation rate.

Capital Constellation Backs Middle Market PE Platform

Published

on

Capital Constellation is the investment platform owned by the Alaska Permanent Fund Corporation (APFC), RPMI Railpen, and Wafra Inc. on behalf of the Public Institution for Social Security of Kuwait (PIFSS). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Canadian Pension Giants Could Support Trans Mountain Pipeline Deal

Published

on

The British Columbian (B.C.) government and indigenous groups publicly oppose the Trans Mountain Pipeline project over a number of issues, which include environmental concerns (potential pipeline spills) and land protections. The threat of project derailment sent jitters to Houston-based Kinder Morgan, Inc., requiring the company to halt non-essential spending on Trans Mountain Pipeline L.P. Calgary-based Kinder Morgan Canada Limited, which owns the pipeline, is a listed company that is 70% owned by Kinder Morgan and 30% owned by stock market investors (float). Kinder Morgan Canada hired TD Securities to explore options regarding the future of the pipeline.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Goldman Sachs Poised to Name David Solomon as New CEO

Published

on

Goldman Sachs is poised to name David M. Solomon, the firm’s president, as its new CEO, replacing Lloyd C. Blankfein. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Popular

© 2008-2018 Sovereign Wealth Fund Institute. All Rights Reserved. Sovereign Wealth Fund Institute ® and SWFI® are registered trademarks of the Sovereign Wealth Fund Institute. Other third-party content, logos and trademarks are owned by their perspective entities and used for informational purposes only. No affiliation or endorsement, express or implied, is provided by their use. All material subject to strictly enforced copyright laws. Registration on or use of this site constitutes acceptance of our terms of use agreement which includes our privacy policy. Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund and central bank events around the world. SWFI is a minority-owned organization.