What does QE3 mean for inflation? That issue dominated proceedings at Euromoney’s Real Return VI, which took place on 27 September at The Pierre, New York.
As always this highly anticipated conference attracted delegates from across the inflation market – more than 200 attended this year. Now in its sixth year, the event came at just the right time, when debate on the monetary policy was raging fiercest.
Richard Peach, Senior Vice President of Macroeconomic and Monetary Studies at The Federal Reserve Bank of New York opened by giving a graphic illustration of why the Fed thought the recovery from this recession was much weaker than that from previous downturns. In doing so, he underlined many of the reasons why the Fed felt obliged to embark on another path of unorthodox monetary policy. He cautioned that QE3 would not, could not create “a new morning in America” but should instead act to anchor confidence around the margins.
Matthew Rutherford, Assistant Secretary for Financial Markets at the US Department of the Treasury followed. He emphasised the commitment of Treasury to the inflation-linked market. He also outlined the latest developments on Treasury’s soon-to-come FRN programme.
A lively discussion on what QE3 meant, whether it would work, was next up. Fresh from Jackson Hole, BNPP economist Julie Coronado argued that the Fed had no alternative to QE3, given the price of inaction. Morgan Stanley’s veteran Fed-Watcher David Greenlaw said that Bernanke et al were, in effect, pressing the wrong buttons.
The one-day conference continued with a series of dynamic panels and in-depth sponsor-led workshops discussing a range of issues from TIPS to energy and from seasonality to gold.
Real return VI was closed by the captivating Dennis Gartman, Editor and Publisher of The Gartman Letter”. Don’t ever view commodities and the like as an asset class or a hedge against inflation was his parting message.
Euromoney would like to thank all sponsors, speakers and delegates for helping to make Real Return VI such a great success and looks forward to developing the event still further next year.
Presentations to download:
- Keynote Address: Richard Peach, Senior Vice President, Macroeconomic and Monetary Studies Function, Federal Reserve Bank of New York
J.P.Morgan: Trading Cross Market Inflation Views
BNP Paribas. Credit and Energy: The Twin Engines of Inflation?