Investment and Retirement
Impacts of the potential termination of the Fed’s asset-purchasing program
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To everyone’s surprise, the U.S. Federal Reserve (Fed) recently announced it will continue with its asset-purchasing program and maintain its present pace. This quantitative easing program was put in place to put downward pressure on U.S. long-term interest rates, support mortgage markets (especially at the residential level) and to make the financial conditions of the American consumers more accommodating.
The economic situation in the United States is constantly improving and, although the end of the program is not expected for a few years yet, the experts can't agree on what the impact of tapering the pace of asset purchase and ending the program will have on the financial markets and the economy.
With its investment management team located in Woodside, a suburb of San Francisco, California, Fisher Investments, founded by Ken Fisher in 1979, has $46 billion in assets under management, $3 billion of which in emerging market mandates. Fisher is also the manager of the Fisher Emerging Markets Equity Fund, which is included in our Strategy and Celestia fund platform. In the text that follows, the manager shares his thoughts on what the impact would be on the financial markets, particularly the emerging markets, of an eventual tapering of the program and its termination.