Epstein Secrets

nce on reinvestment policy* and interplay between rates and reinvestments Note: (*) Currently, the Fed reinvests its maturing holdings of MBS and Treasuries purchased during QE. Research Deutsche Bank [email protected] http://houseview.research.db.com TheHouseView Special — 9 December 2015 7

December 1 Fed officials "When the Committee begins to normalize the stance of policy...it is a day that I expect we all are looking forward to." Janet Yellen, Fed Chair, 3 December "Assuming that we continue to get good data on the economy_ there's a strong case to be made in December to raise rates." J

more consistently projecting a December taper. If they do taper, I expect it to be a taper light, on the order of 55 to 515 bn (skewed more toward Treasuries than MB5). This would be accompanied by a statement that is relatively dovish--i.e., that reinforces the message that they expect rates to be held

about the future course of policy at the press conference in January and then leave two days later? Bernanke could step down or step aside and let Yellen run the meeting and do the press conference. That could be a bit awkward, but it would also make Yellen's first move one that leads the Committee i

garnered new members; even Federal Reserve Chair Janet Yellen and Vice Chair Stanley Fischer have joined the fr

onetary policy poses to the business cycle, which is apparent in both its willingness to step back from planned rate hikes last year as well as Chair Yellen’s acknowledgment that an “abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into recession.”!

e income. In the sections that follow, we review the specifics of each fixed income market. US Treasuries While 2016 began as a bumper year for US Treasuries, it ended in a rout. The yield on 10-year Treasury bonds, for example, reached an all-time low of just 1.36% by the middle of last year before joltin