By Bilal Hafeez 03-06-2019
In: post | Other

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Why Is the Fed’s Balance Sheet Still So Big? San Fran Fed on how the balance sheet needs to remain large because the Federal Reserve now implements monetary policy in a regime of ample reserves, using a different set of tools than in the past to achieve its interest rate target.

Improving U.S. Monetary Policy Communications Authors will be presenting their paper at the Fed today. Their punchlines are “simplify public statements, while conveying any divergence of views; clarify how policy will react to changing conditions; and highlight policy uncertainty and risks.”

The effects of concentration in the asset management industry on stock prices  Using data from the US, the blog suggests that the increased concentration has led to more volatile prices of stocks held by large institutional investors. This poses challenges for regulators trying to weigh price efficiency and economies of scale.

Fabozzi: Finance Must Modernize or Face Irrelevancy Remember his textbook/handbook?! Anyway, in this transcript of an interview he says: “The over-reliance on calculus is symptomatic of the subject’s stagnation and a disservice to the students who aspire to work in asset management.”

Just the Facts About Market Corrections  Since 1950, the S&P 500 has experienced an intra-year peak-to-trough pullback of 5% or worse in 65 out of 70 years. So roughly 93% of the time, a 5% correction has taken place from 1950-2019.

The costs and benefits of performance fees in mutual funds The blog presents empirical evidence showing that performance fee contracts do not improve fund performance, particularly in instances where contracts fail to specify a benchmark for results.

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