The Research Foundation of AIMR & Blackwell Series in Finance

1 total work

The Role of Monetary Policy in Investment Management

by Professor Gerald Jensen, Robert Johnson, and Jeffrey M. Mercer

Published 25 May 2001

Global stock and bond markets rise and fall in response to naunces in speeches made by Federal Reserve Board Chairman Alan Greenspan and other Fed officials. In fact, markets often vacillate immediately and dramatically in response to Greenspan's public remarks. The relationship bertween Fed monetary policy and security return patterns deserves serious examination, and receives it within these pages. This book presents substantial evidence that an association exists between monetary conditions and returns to various asset classes. It goes on to show how, over the past four decades, investors had the opportunity to use monetary policy to significantly enhance their portfolio performances. Designed to help readers better understand the importance of monetary policy in investment management, this book also explores topics such as How one can gauge the monetary policy stance of the Federal Reserve What actions the Federal Open Market Committee (FOMC) take that affect monetary aggregates How many "tools" the Fed relies to carry out its objectives.