Russ Koesterich, Chief Investment Strategist at BlackRock has given his views on the likely Fed taper, which he expects to be small. He believes that bond purchases will be reduced by $10 - 15 billion per month from the current $85 billion per month. He gives two reasons for the small reduction, namely the lack of inflationary pressures outside of oil and the uneven economic recovery in the US. From these observations, he finds too short-term opportunities for tactical investors in this environment. He suggest considering high yield bonds and emerging market equities, with the latter having been heavily sold off in recent quarters amidst fears of higher interest rates and falling emerging market currencies. (VIEW LINK)
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