On July 17, Sir Michael Hintze spoke at the third annual Delivering Alpha conference, presented by Institutional Investor and CNBC.
Hintze took part in a panel called “The Great Rotation,” which debated the potential asset allocation move from bonds into equities. During the panel, the issue of how investor decisions are impacted by Federal Reserve policy was centre stage.
Institutional Investor reports Hintze’s comments on the issue:
“Central banks are still distorting the market,” Michael Hintze, the CEO of CQS and longtime critic of the Fed’s quantitative easing policies, told the audience at Delivering Alpha…The yield on ten-year U.S. Treasuries should be trading at around 4 percent, based on historical averages, but “it won’t get there” because of the Fed’s bond buying, he contended. “And that’s the problem.”
Still, Hintze welcomed the recent spike in U.S. yields, which Bernanke triggered in May and June by hinting that the Fed could start tapering back its bond purchases later this year. “It’s very healthy because people thought it could go on forever,” he said.