TD Securities' Misra on Fed Policy Outlook

The video discusses the bond market's low yields despite a strong economy, attributing this to the Fed's dovish stance. It highlights concerns about the economic outlook and market reactions, especially if growth decelerates as the Fed exits. The discussion covers the Fed's tapering strategy, economic strength, and expectations for rate hikes. It also examines the impact of global growth on Treasury demand and the rates market, noting the influence of the Delta variant.

What is the main reason for the bond market yields staying low despite a strong economy?

• High inflation rates

• Increased fiscal stimulus

• Dovish stance of the Federal Reserve

• Strong global growth

What assumption is being made about inflation in the context of the bond market?

• Inflation is permanent

• Inflation is transitory

• Inflation is decreasing

• Inflation is irrelevant

What is the market's expectation regarding the Fed's tapering and its impact on growth?

• Growth will be unaffected

• Growth will remain stable

• Growth will slow down

• Growth will accelerate

What is the expected impact on long end rates if the market reprices the end point of the hiking cycle?

• Rates will fluctuate

• Rates will increase

• Rates will remain unchanged

• Rates will decrease

Which factor is considered a potential game changer for the bond market towards the year end?

• Global growth trends

• US labor market conditions

• Domestic fiscal policies

• Technological advancements