Market Has Priced in September Fed Tapering: Magnus

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Aug. 22 (Bloomberg) -- George Magnus, senior independent economic advisor at UBS, looks at whether markets are prepared for tapering by the Federal Reserve and examines the strength of the U.S. economic recovery. He speaks on Bloomberg Television's "The Pulse."

We have it all covered.

George magnus.

We were talking about the risk on the market and where you see everything going.

What is the market pricing in?

There is still a big concern that they may get hud wrong and it comes earlier than expected.

The market is pretty much there, actually.

Between bernanke's statements in june and, probably the end of july and august, 10 year treasuries are up 100 basis points and it is probably a little bit more than that by now.

Given that bernanke and other federal reserve officials have gone out of their way to -- they don't have to persuade the market, the market understands that there's a country mile between the beginning of tapering and the rise of interest rates, that is when it will come.

That, clearly, would have an effect on the shape of the yield curve and the finance of costs on a continuing basis.

We -- the talk is about us going back to 1994 and the short-term interest rates and the bond markets collapse.

I will not happen.

There is an issue about investors and companies that have embraced the implications of zero rates and julie the last five years.

The shaft, in of itself, is a repositioning, and has not fully express itself in the markets.

Actually, i think the markets have pretty much try stay in a september adjustment on tapering will stop bucks one of the things that came out of the minutes was the rise in rates.

It will be compensated for in a better housing market.

Those will from the those issues.

That would trump the rising rates.

Would you agree?

Are we at that level of recovery in the united states?

It is a bit trickier than it looked a few months ago.

Mortgage prices are a bit sticky.

We have fiscal shenanigans looming.

There could be -- you know, the structure of employment and the payrolls, the structure of employment is still a little bit, a little bit week.

I think that the federal reserve essentially thinks that the economy does not need this anymore, this she we.

We do not like the implications of it, anyways.

There are new ones is about how quickly they will want to withdraw it.

This text has been automatically generated. It may not be 100% accurate.

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