How Wall Street coverage funds are preparing for an eventual output of Jerome Powell

The coverage funds of Wall Street They are already preparing in case the president of the United States, Donald Trumpsays goodbye to the Federal Reserve leader (Fed), Jerome Powellbefore he finished his mandate next year.

How are Wall Street funds to a jerome powerl outflows

For example, RBC Bluebay Asset Managementwhich is part of the US $ 491,000 million Global Asset Management, is Buying 2 -year Treasury Bonds and selling titles at 30 years.

According to Mark Dowding, director of Investments for Fixed Income in the Fund, a new president of the Federal Reserve would face pressure to cut the interest rates, which would cause a drop in initial yields.

“The long -term yields could well move in the opposite direction as the independence of the Fed weakens and the medium -term inflation risks increase,” he said.

For its part, from Fourier Asset Managementare Buying the convertible bonds of Exchange Coinbase because they would generate stable income and can be transformed into shares.

Orlando Gemes, the investment director of the Wall Street Fund, does not foresee a massive market reaction initially if Powell is fired, but believes that the result will be inflationary. And if the fees are cut, the yields of these convertible bonds will fall.

Mixed strategies

In addition, Capital Futures Coloma It is directly Betting against the dollar selling the currency most popular of Wall Street.

David Burkart, founder and investment director, said that “it is very likely that whoever replaces Powell has a more moderate profile, which would reduce the rate differential between the United States and other economies, thus weakening the relative attraction of the dollar.”

In turn, the Executive warned that, in the long term, the increase in debt and tax burden in the United States could stop economic growth, which would also press the dollar down.

On the other hand, Union Bancaire Privée this Selling shares of Japanese exporting companiesmainly those that do not have production bases abroad.

Zuhair Khan, a senior portfolio manager, anticipated that the Yen would be appreciated and that most Japanese actions would go back if Powell leaves his position ahead of time.

According to Khan, the internal market -oriented actions could have a relatively better performance than exporters, although they expect all to be affected in an early starting scenario of the Fed president.