Yellen Will Be Slow to Raise Rates: BofA's Misra

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Aug. 8 (Bloomberg) -- BofA Merrill Lynch's Priya Misra and A&G Capital Research's Hilary Kramer discuss the outlook for U.S. bonds and Federal Reserve monetary policy on "Street Smart." (Source: Bloomberg)

The bond market.

A it has been fascinating that everybody has lost money on this trade.

They have been getting clobbered and they continue to pile in.

You saw a little turnaround in yields.

Earlier today people buy into bonds.

Collect stories and we continue to be in that is if you look at fundamentals you may have it ask -- you may have it absolutely right.

The consumers actually hanging in there.

The market is hanging in there.

And yet we are 60 basis points lower.

I don't think it is a fundamentally driven trade area did -- driven trade.

Ofit is fear driven.

A people are so terrified of the hiking cycle that they are actually crashing.

You get three corners in a row.

A second quarter 4%. people start reassessing that long-term growth said it she.

I'm sure you saw making a bet that the fed will come sooner.

A lot of fed governors have been outspoken about the fact that they want to see rate raises.

It is not just loeb.

It is all these big billionaires making this bet.

So far within the fed we have not seen enough.

I think jackson hole is very interesting.

It is an academic conference.

The discussion is the labor market.

It is like soho house.

Our sense is that she is going to be a bit slow.

Give it a little bit of time and when you start you are sure the economy can sustain rates then you go faster.

Everybody has been talking about this and trying to time that out, even with rates.

What is going to be the tipping point?

What will make this be the thing that is the signal where companies can finally raise wages?

We have a flat reading.

You get a point to on that for a couple of months.

And you start seeing some signs that there is maybe some slack in the labor market and it is shrieking.

-- it is shrinking.

The fed is always going to have to focus.

I think they have to feel better that waged -- that are with wage inflation down the road.

We may not see wage inflation because this is a recovery characterized as a jobless recovery.

We shouldn't really focus there is much.

That is why we might get a surprise.

We call her the gray lady singing.

I don't think we will see janet yellen raising rates anytime soon because she wants to see us continue to recover, even though the numbers show higher gdp and it looks like we are getting into that.

Where rates goes a different conversation.

We all knew she was dovish the four she came into the job.

I don't know why those expectations didn't get turned around.

I hope we are all on the leading edge of wage inflation.

Thank you for joining us.

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


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