JPMorgan's Michele: Investors Will Miss Fed Bond Buying

The video discusses the Federal Reserve's tapering process and its impact on the bond market. It highlights how the Fed's asset purchases influence Treasury yields and market dynamics. The conversation also covers the timing of tapering and its effects on monetary conditions, emphasizing that while the pace of asset purchases may slow, it is not a reversal of policy.

What is the main reason traders lose the will to go short when the 10-year Treasury yield reaches around 170?

• The yield becomes too volatile.

• The Fed is constantly buying bonds.

• The Treasury issues more bonds.

• The Fed stops buying bonds.

What happens to traders' willingness to be long when the 10-year Treasury yield drops to about 1:20?

• They start buying more bonds.

• They become more willing to be long.

• They ignore the yield changes.

• They lose the will to be long.

How does tapering affect monetary policy according to the discussion?

• It reverses monetary policy.

• It has no effect on monetary policy.

• It is a form of tightening.

• It is a form of easing.

What is the argument against tapering being a reversal of monetary policy?

• The Fed is selling assets.

• The Fed is increasing interest rates.

• The balance sheet is expanding at a slower pace.

• The balance sheet is shrinking.

What is the potential impact of missing the $120 billion in additional purchases per month?

• It will increase the pace of asset purchases.

• It will lead to a reversal of monetary policy.

• It will cause the balance sheet to shrink.

• It will slow down the expansion of the balance sheet.