Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. ECONOMICS
January 30, 2013 12:00 AM

Fed stays put on rates, bond buys

Hazel Bradford
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Gradual economic growth and little progress in the unemployment rate convinced members of the Federal Open Market Committee to continue with monthly Treasury purchases of $85 billion and to keep the federal fund rate at zero to 0.25%, according to a statement from the first two-day meeting of 2013.

    The monthly purchases of $40 billion in agency mortgage-backed securities and $45 billion in longer-term Treasury securities “should maintain downward pressure on longer-term interest rates, support mortgage markets and help to make broader financial conditions more accommodative,” according to the statement issued Wednesday. “If the outlook for the labor market does not improve substantially, the committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate.”

    This week's decision to stand pat was a sharp contrast from December when the Federal Reserve announced it would switch from a calendar-based approach to one driven by changes in the unemployment rate or other indicators, according to the FOMC. “What the Fed did then was a pretty big deal, but there wasn't a lot that's happened since then. It was widely expected to be a yawner, and it didn't disappoint,” said Joshua Feinman, managing director and chief global economist for Deutsche Bank Asset Management in the Americas and a former Fed economist.

    A yawner is fine, according to Chris Orndorff, senior portfolio manager at Western Asset Management Co., which runs $459.7 billion. “They were being very careful this time to choose their words carefully and retain their dovish posture, so the market wouldn't get confused.”

    “We're getting a distillation of the message that they want to send to the market right now,” said Robert Tipp, managing director and chief investment strategist at Prudential Fixed Income, which ran $356 billion as of Sept. 30. “The Fed is saying, what we want is a vastly improved picture. Until we get it, we are going to be full tilt, at $85 (billion) per month and keeping this interest rate extremely low until we get a much better economic picture. We're looking for much better.”

    Meanwhile, Treasury 10-year yields fell Wednesdayfrom the highest level in nine months after a government report showed the U.S. economy unexpectedly contracted in the fourth quarter.

    The benchmark yield touched the highest level since April early on Wednesday before Federal Reserve policymakers ended a two-day meeting. Gross domestic product was restrained by the biggest plunge in defense spending in four decades and dwindling inventories as household purchases picked up, the Commerce Department said.

    The GDP report was “certainly a catalyst for some buying,” said Christopher Sullivan, who oversees $2.1 billion as chief investment officer at United Nations Federal Credit Union, New York. “This does shatter the preconception of underlying momentum” in the economy.

    The 10-year yield was little changed at 2% at 9:08 a.m. EST after touching 2.03%, the highest since April 25, according to Bloomberg Bond Trader data. The price of the 1.625% notes due in November 2022 was 96 20/32.

    Bloomberg contributed to this story.

    Related Articles
    Fed's course could make for an interesting 2013
    Fed minutes: Moderate growth forecast fueled shift to jobless rate
    Fed stays put on federal funds rate and purchases
    FOMC members signal possible rate hike
    Recommended for You
    Debate rages over practicality of modern monetary theory
    Debate rages over practicality of modern monetary theory
    Global economist warns of perils of short-termism
    Global economist warns of perils of short-termism
    Professors get Nobel award for climate change analysis in economics
    Professors get Nobel award for climate change analysis in economics
    Research for Institutional Money Management
    Sponsored Content: Research for Institutional Money Management

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    The Future of Infrastructure: Building a Better Tomorrow
    Fulcrum Issues: Equity Returns and Inflation — Choose Your Own Adventure
    What Matters Most in Considering a Private Debt Strategy
    Why pursue direct lending in the core middle market?
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing