The Taper call didn’t trick Colonial First State Asset Managment head of rates Annette Mullen.
Most people were surprised by the Fed’s decision to continue its massive stimulus program, which sees it buy around $85 million worth of its own bonds every month.
September had even been renamed Sept-taper, so you can forgive investors who didn’t see the huge surprise coming.
But according to the AFR after a trip to the US, Japan and Europe where she met with central bankers and investors, she decided the Fed was more likely to continue its QE program than wind it down.
And she was able to sell out of the necessary short positions.
Ben Bernanke basically said he wants to be sure the economy is improving before he stops printing money to buy back bonds.
“We timed it well. We have done well out of it and for us that was the risk reward. The more we looked at it, the more the economic data didn’t support the removal of the taper,” she said.
Read more about it here.