Monday, 22 February, 2021
(BFW) Yellen Addresses Super-Long Issuance and Financial Taxes
——————————————————————————-
This message may contain confidential or privileged information. If you are not
the intended recipient, please advise us immediately and delete this message.
The unauthorised use, disclosure, distribution and/or copying of this e-mail or
any information it contains is prohibited.
This information is not, and should not be construed as, a recommendation,
solicitation or offer to buy or sell any securities or related financial
products. This information does not constitute investment advice, does not
constitute a personal recommendation and has been prepared without regard to
the individual financial circumstances, needs or objectives of persons who
receive it.
2021-02-22 14:33:31.768 GMT
By Cameron Crise
(Bloomberg) — Janet Yellen is on the tape with a few
interesting comments:
*YELLEN: ISSUING LONGER-TERM SECURITIES SEEMS TO MAKE SOME
SENSE
*YELLEN SAYS COULD LOOK AT LONGER-TERM BONDS AGAIN; MARKET
TINY
*YELLEN: DEBT INTEREST PAYMENTS BETTER METRIC THAN DEBT-GDP
There has been plenty of talk of super-long issuance over
the past few years. It’s safe to say that while pensions, etc.,
would love to have a higher-yielding source of duration for ALM
purposes, dealers are decidedly unenthusiastic about having to
price, bid and warehouse very long-dated bonds. It looks like
we’re gonna be in for another round of consultations.
*YELLEN: FINANCIAL TRANSACTION TAX WORTH LOOKING AT
*YELLEN: FIN. TRANSACTION TAX COULD HELP, ALSO HAVE BAD
IMPACT
*YELLEN: WEALTH TAX WOULD HAVE TOUGH IMPLEMENTATION
PROBLEMS
*YELLEN: CAPITAL GAINS TAX HIKE MIGHT BE WORTH CONSIDERING
One of the big challenges for the market will be any
changes in tax policy toward a less-friendly regime. A Tobin tax
(which would put a levy on transactions) has been bandied about
in academic circles. But while it might not really impact
longer-term trading, it would wreak havoc on HFT, algos, etc.,
and thus affect market liquidity in the current ecosystem.
Obviously, a change in the capital gains tax could encourage
profit-taking on a whole host of assets if there’s a window to
lock in the lower, current rate.
To contact the reporter on this story:
Cameron Crise in New York at ccrise6@bloomberg.net
https://blinks.bloomberg.com/news/stories/QOXPRVDWLU6O
