Decision not to taper brings down our view on range for Treasury movement, says BlackRock’s Rieder

Rick Rieder, CIO of Fundamental Fixed Income at BlackRock, provides the following comments regarding the FOMC decision.

The decision not to taper – coupled with the lack of guidance on when tapering may finally take place – brings down our view on the range for movement in the 10-year Treasury by roughly a quarter point to 2.50% to 2.85%. But the range could vary even more widely — and investors may face more volatility — amid the next few weeks of economic data, US budget showdown and debt-ceiling debate and the nomination of the new Fed chief.”

The significant divisions over monetary policy exhibited in the details of yesterday’s decision mean the next Fed Chairman will have a huge and vitally important task in reconciling the views of policy makers and communicating them clearly to markets and investors.”

Several other important changes to the membership of the Federal Open Market Committee coming up bear close scrutiny as we head into 2014, most notably the addition of noted policy hawks Richard Fisher of the Dallas Fed and Charles Plosser of Philadelphia as voting members while some of their more dovish colleagues rotate off.

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