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Fed Chair Janet Yellen’s optimism is justified: JPMorgan strategist

By dailymail / Published on Thursday, 15 Jun 2017 00:15 AM / No Comments


Kourtney Gibson, head of global equity and fixed income at Loop Capital, told CNBC she liked how Yellen took away the rhetoric surrounding inflation.

The Fed chair told reporters that the weakness in inflation likely is driven by factors that won’t persist, like one-off reductions in prices of wireless telephone services and prescription drugs.

“I really do think that she really kind of pushed some of those naysayers aside and, candidly, that third rate hike may just be justified,” Gibson said in an interview with “Closing Bell.”

Meanwhile, Jim Bianco, president of Bianco Research, thinks the Fed is almost done raising rates.

“There is maybe one more rate hike left, and then they are going to pivot to the balance sheet,” he said. “The reduction of the balance sheet is another version of raising rates.”

In fact, the Fed has said in the past that if it reduces the balance sheet by $500 billion, it is the equivalent of two rate hikes, he pointed out.

However, based on what the central bank said on Wednesday, “They’re going to go very slow,” he told “Closing Bell.” “It’s going to be the equivalent of about one rate hike a year.”

A statement on the program said the roll-off is targeted to start this year, though no specific date was provided.

— CNBC’s Jeff Cox contributed to this report.