Business Insider is offering a new feature in our “10 Things You Need To Know Before The Opening Bell” email newsletter where we interview top strategists, economists, and traders to get their thoughts on key market questions.
Today’s interview is with Richard Bernstein, CEO of Richard Bernstein Advisors.
BUSINESS INSIDER: To what extent do you think poor weather has impacted this winter’s economic data?
RICHARD BERNSTEIN: Who knows, but it is unlikely that the economy just stopped.
BI: What’s the big story that nobody is talking about right now?
RB: The extreme undervaluation of high yield municipal bonds. Interestingly, in December and January it was more expensive to protect against a Puerto Rico default than it was to protect against a Ukraine default.
BI: Are you optimistic about Janet Yellen as Fed chair?
RB: People think of the Fed much too narrowly. Yes, they set monetary policy, but the Fed is also supposed to be a regulator. Greenspan was anti-regulation, and Bernanke had bigger issues on his hands cleaning up Greenspan’s mess. Yellen might lead the Fed to again be a regulator. Tighter bank regulation (or even bank regulation period when compared to the Greenspan years) could be a form a tighter monetary policy.
BI: The stock market is roaring back to all time highs. Do issues in EM not have as big an impact on U.S. markets as people argued a few weeks ago?
RB: The issues in EM actually benefit the US economy. Lower commodity prices, a stronger dollar, and a rush to US assets are all good for the US. Certainly, it’s not all good for US multinationals, but it could be a very good environment for domestic US stocks.
BI: What’s something you’ll be watching this week and next?
RB: The Knicks continue to lose. I hope they don’t resign Carmelo…
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