Neil Chriss, founder of $1.1 billion hedge fund Hutchin Hill Capital LP, said the U.S. Federal Reserve’s program to buy mortgage securities is “maximally stimulative.”
“This is a program that in size is as big as the first quantitative easing,” Chriss said at the Bloomberg Markets 50 Summit in New York today. “We think initially or for a period of time you’re going to see rising markets in risk assets but also lower bond yields and a weakening dollar.”
The Fed said today it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment.
Chriss said he was “bearish” on the economy and “cautious” in positioning his hedge fund. Chriss, a former portfolio manager at SAC Capital Advisors LP, started the firm with $300 million from Renaissance Technologies Corp. founder James Simons.