Fed's Big Bond Unwind May Clobber U.S. Stocks, Corporate Debt
- Wall Street committee highlighted risks to Treasury this month
- Investors may be underestimating pain, Morgan Stanley warns
Kerry Craig, JPMorgan Asset Management global market strategist, discusses the outlook for Fed policy with Bloomberg's Betty Liu on 'Bloomberg Daybreak: Asia.' (Source: Bloomberg)
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Stocks and corporate bonds may be the surprise big losers once the Federal Reserve starts reducing its $4.5 trillion balance sheet.
A committee of investors and banks highlighted that outside risk in a presentation to Treasury Department officials this month. A week after that, strategists at Morgan Stanley separately warned that investors are underestimating the trouble that the Fed’s plans could bring to corporate debt markets.