The Fed Is Being Consistent: Hill

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Jan. 29 (Bloomberg) –- Affinity Investment Advisors’ Jeremy Hill and Bloomberg’s Mark Crumpton discuss the markets reaction to the fed taper decision in “On The Markets” on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

They said they would, but even in the face of the market selloff, is this the path of least resistance?

In one word, it is consistency.

A leopard doesn't change it stripes and the fed is being consistent.

The reason they are tapering is because they've told us they believe the u.s. economy is going to grow between 2.8 and 3.2% this year.

It has nothing to do with what's going on in emerging markets or any other issues.

That is their core belief and a need to maintain credibility.

Rex if they had decided in the face of this latest emerging- market turmoil, then what?

How the markets have reacted?

I think the markets would have reacted very poorly.

Emerging markets are down roughly 10% year to date.

To be frank, i don't really think the fed pays that much attention to that kind of move.

They are more concerned about that.

What direct result has qe had on the economy?

If you go back to what ben bernanke wrote, he had two goals.

One was to increase the wealth effect and the other was to bring down rates.

He has brought down rates.

Whether he's increased the wealth of facts that is debatable.

We will see rates increase in eventually as we taper.

With all the stimulus, why do you suppose money is still sitting at the banks question are -- sitting at the banks?

It is at historic lows right now.

We have talked about deleveraging and said consumers are ready to deleverage, but i don't think we are done.

Money going into the system going into the reserves.

What does that mean for the corporate community?

Lex that is the $64,000 question.

Likely it will increase over the longer-term and we had to be careful because on the short end of the rates curve, you might want to see rates fall back a bit if you get aggressive that action.

Why does it seem as if there is so little conviction in the equity markets right now?

You to remember, little conviction but it's really just indigestion.

At affinity, we are long-term guys.

When we look at this, we are only down four percent year to date, but that's in the reference of last year were stocks went up almost everyday.

Rex what is going on in the markets right now?

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

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