The Fed is Now in `No-Taper’ Mode: Adams

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Oct. 15 (Bloomberg) –- Henderson Global Investors Director of Fixed Income Kevin Adams discusses the negative effects of the debt debate on the global markets and Fed Tapering with Mark Barton and Anna Edwards on Bloomberg Television’s “Countdown. (Source: Bloomberg)

What kind of impact are you factoring into all this, into the growth story?

It will have a negative impact on growth.

People may delay their purchase, and that will lead to slower growth.

We are thinking potentially a quarter or more growth is a possibility, but we won't see the impact because there is no accident -- or is no economic data.

Once it starts getting published or will be all sorts of distortion.

Any slowdown is going to be blamed on the government shutdown and debt ceiling uncertainty.

One thing cushioning the effect all this uncertainty is having on markets, the fact that the federal reserve is tapering.

It is hard to imagine it taking place this year.

Exactly.

I think the longer this goes on, the less transparency, the more reason the fed has two not undertake tapering.

I think we saw from said members the main reason they did not taper in september was concerned about the fiscal situation, and the longer the situation goes on, the less likely the fed will make decisive moves to and their qe program.

Has the last 50 days changed your view of global markets?

Have you changed allocation of capital at all or not?

Not materially.

I think what we are seeing is further erosion of credibility.

That has to make us more concerned about the long-term impact of bonds, and we want to think about high risk remains built into the treasury.

This is not just a u.s. problem.

It is the budget deficit globally and the ability of government to address those is very tough when faced with a balanced process, where there is no strong leadership or strong majority.

What are you favoring?

Aaa investment grade, high quality strong cash flow, good balance sheet companies who are in the financial state with the government and where we think we will get our cash back with certainty.

Not higher ratings?

There is not a lot of value in the aaa area.

Most of the value lies in the triple be.

Thank you.

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

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