Paul McCulley on Consuelo Mack's WealthTrack

Discusses the US economy and Fed policy.

Points of interest:

1) Fed may raise rates in 2012 (noted 6-12 months to signal or raise rates during various parts of the video), but believes the Fed will signal that they will move to raise Fed funds rate

2) When Fed raises (signals the intent to raise) rates, the market will fall by around 10%.

3) Notes if you have been riding cash for two years, don't invest your cash money in the stock market.  If you stuck it out this long, wait a bit longer.  When the Fed hikes rates, the stock market will have a "wicked" correction.  Don't buy into the face of the Fed hiking interest rates.

4) Indicates this is not a propitious time to make a lot of money in the investment portfolio.  Don't try to squeeze performance out right now.  In the fullness of time, the Fed needs to normalize rates.  He believes eventually the Fed funds rate will normalize in the 2-3% range, not soon, but that is where he believes we will be headed.  Real rates will be right around 0% then.

5) 10-year bond at 4-5% as rates normalize.

6) For retail investors, he doesn't see any reason for individual investors to play around with the 30-year
bond.