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FOMC Statement

FOMC Statement. Forward Guidance. What is forward guidance?

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FOMC Statement

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  1. FOMC Statement

  2. Forward Guidance • What is forward guidance? • “The Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.”

  3. Quantitative Easing • What is QE? • The Committee agreed today to purchase agency mortgage-backed securities at a pace of $40 billion per month. • The Committee will also continue to extend the average maturity of its holdings • “These actions, … will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year”.

  4. Housing • Importance of housing market in past recessions • “The housing sector has shown some further signs of improvement, albeit from a depressed level” • Impact of QE: “These actions… should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

  5. How Much Help Do Banks Need?

  6. Regulatory Issue

  7. Portfolio Overview

  8. Summer Performance • What was our thesis on market conditions this summer? • S & P 500 performance: Closed May 1 at 1,405 - Closed August 31 at 1,406. • What is our benchmark for performance? • How did we perform

  9. Why does TFG do well? • Fundamental analysis, valuation models • Investment philosophy - What is value investing? • Why are we drawn to value investing? • What do we look for in a company? (Moat)

  10. A Closer Look: Disney (DIS) • Pitched last semester by e-board • Bought at $41.77, now over $52 (25.23% gain) • What was our thesis on Disney? • Why do we still hold Disney?

  11. Moving Forward • Sectors to watch – Energy, Healthcare and Consumer Goods • How do we think the S & P will perform? • Will monetary policy have a lasting impact? • Growth in EM, rebalancing of Chinese economy • Do more with fixed income component • Evaluating current holdings

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