Mashreq Capital's Kettlewell on FOMC Tapering, Oil Prices, Bond Yields

The video discusses the impact of oil price fluctuations and the Federal Reserve's tapering timeline. It highlights the debate within the Fed regarding when to start tapering, considering economic indicators like employment and consumer sentiment. The discussion also covers the geopolitical implications of the U.S. exit from Afghanistan on oil markets and OPEC+ dynamics. Investment strategies in long-duration bonds, particularly in the GCC region, are explored, emphasizing the interest rate risk and the potential for value in emerging markets.

What are the two main camps within the Fed regarding tapering?

• Those who support quantitative easing and those who oppose it.

• Those who want to increase interest rates and those who want to decrease them.

• Those who focus on inflation and those who focus on employment.

• Those who want to start tapering this year and those who want to wait until next year.

What is the main concern about completing the taper by March 2022?

• It could result in a recession.

• It might cause inflation to rise.

• It could lead to a market tantrum.

• It might strengthen the dollar too much.

How has the recent decline in oil prices affected GCC sovereigns?

• It has had no impact.

• It has caused a financial crisis.

• It has improved their budget outlook.

• It has led to higher budget deficits.

What is the potential impact of the US's Afghanistan exit on its stance towards Iran?

• It will improve relations with Iran.

• It will have no impact.

• It may toughen its stance.

• It may lead to a softer stance.

What is the focus of the investment strategy discussed in the final section?

• Short-term bonds in developed markets.

• Equity investments in emerging markets.

• Real estate investments in the US.

• Long-duration bonds in the GCC region.

Why are long-duration bonds in the GCC region considered valuable?

• They are unaffected by inflation.

• They offer high credit risk.

• They are cheaper compared to other regions.

• They have low interest rate risk.

What is the main risk associated with the long-duration bond positions discussed?

• Liquidity risk

• Currency risk

• Interest rate risk

• Credit risk