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A.M. BestTV: Insurers Watch Federal Reserve for Quantitative Easing, Rate and Chair Changes
[November 16, 2017]

A.M. BestTV: Insurers Watch Federal Reserve for Quantitative Easing, Rate and Chair Changes


In this A.M.BestTV episode, A.M. Best Associate Directors Meg Mulry and Jason Hopper of A.M. Best's economic and industry research department review the expected impact of the Federal Reserve's (Fed) tapering of quantitative easing, the nomination of Jerome Powell as next Fed chairman and the possibility of near-term rate hikes. Click on http://www.ambest.com/v.asp?v=qereport1117 to view the entire program.

"The Fed has laid out a plan to end quantitative easing," said Mulry. "Also, over the next 24 months, they are going to slowly scale back their purchase of asset-backed securities, as well as Treasuries, until their balance sheet is shrunk to a size that they are more comfortable with. A.M. Best will be watching to see if there are any upticks in volatility, liquidity, as well as a possible December rate hike and Jay Powell's appointment as the new chairman."

Hopper spoke about the bond portfolios of the life/annuity and property/casualty segments.

"From an investment standpoint, life/annuity insurers have increased their bond portfolio duration schedule, while property/casualty insurers have decreased their duration. The property/casualty industry has more of their bond portfolio maturing over the next six years than the life/annuity segment, giving them a little bit more flexibility to take advantage of rates, should they increase over the next couple years."

To access the Best's Special Report, titled, "The End of Quantitative Easing - How Will Insurers React?" go to http://www3.ambest.com/bestweek/puchase.asp?record_code=267338.



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A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.


A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Company, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.


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