Salient to Investors:

Stanley Druckenmiller said:

  • If the Fed were to end QE it would be a big deal for the financial markets, as indicated by the sell-off in bonds and emerging markets in the past few months on the mere hint that the Fed might taper.
  • Fed purchases have subsidized all asset prices, so completely stopping them would mean the market will fall.
  • He has very small investment positions, including long some Japanese equities and short the yen.
  • It is naive to say the next Fed chairman won’t matter because it is a really important appointment.

Jeffrey Gundlach at DoubleLine Total Return Bond Fund said the Fed is making a big mistake by moving ahead with its exit plan without pegging it more closely to market conditions.

Economists expect the Fed to taper Treasury purchases by $10 billion this month.

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