Concern that a surge in U.S. bond yields will curb the expansion is overblown, says money manager James Paulsen. When coupled with gains in confidence, higher borrowing costs are a healthy sign for the world’s largest economy.
Federal Reserve Chairman Ben S. Bernanke has a choice: Sacrifice stimulus by trimming bond purchases or risk market distortion by further expanding the Fed’s $3.5 trillion balance sheet. Last week’s payrolls report gives him cover to cut.
The Federal Reserve won’t exit any time soon from unprecedented bond-buying under its quantitative- easing stimulus strategy, even as the world’s biggest economy shows signs of recovery, according to Stephen Stanley of Pierpont Securities LLC.
Federal Reserve Chairman Ben S. Bernanke prepared to deliver a speech on the outlook for the U.S. economy as some of the most optimistic forecasters scaled back their projections for growth in the second half.