Click to enlarge
Source: Economist


Nice chart via the Economist showing correlations between various asset classes and Fed actions . . .

Category: Digital Media, Federal Reserve

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “Fed Tapering: Asset Class Sensitivity”

  1. sellstop says:

    O’kay. Here is my igonorance.

    The Fed had it easy in keeping U.S. interest rates down. They were aided and abetted by the rest of the mercantilist world who was intent on keeping the U.S. Dollar artificially high by buying dollars with their own printed money and then investing in U.S. treasuries.. For decades. And they were joined by the largest banks, insurance companies, and hedge funds in the “carry trade”.
    Now we are in reversal mode. Who will fail? This is just the latest tidal shift in the world economic soap opera of the last thirty financial engineering years.
    The Fed has no intention of an early or abrupt end to QE. That is why the dollar is so weak.


  2. [...] Infographic: Sensitivity of different asset prices to Fed balance sheet expansion | The Economist Shows historical “average elasticity” (e.g. beta vs growth in Fed balance sheet) of various global assets & their standard deviation from that mean during QEs. Assets most exposed to tapering (in descending order): $TNX/$IEF, German 10y Bunds, British 10y bonds, EU IG bonds, $LQD, $GC_F, $DXY/$USD. Assets with suppressed Beta to Fed balance sheet: $TUR, $HYG, $EEM, $HG_F, $EFA. #Correlation [...]