‘Oracle of Tampa’ expects a taper boost

Tuesday, 10 Dec 2013 | 1:10 PM ET
Taper is bullish for markets: Pro
Tuesday, 10 Dec 2013 | 12:07 PM ET
Discussing the impact to the global markets if the Fed decides to taper sooner than later, with Jay Bowen of Bowen Hanes. He is eyeing the shale revolution, and railroads.

A reduction in the Federal Reserve's $85 billion-per-month bond-buying program would be a boon for stocks, Jay Bowen of Bowen Hanes & Co. said Tuesday.

"After all, who wants to be in a perpetual state of monetary life support? That is going to get you nowhere, as Japan has demonstrated over the last 20 years," the "Oracle of Tampa" said on CNBC's "Halftime Report."

Bowen, who runs the $1 billion pension fund for Tampa, Fla., firefighters and police officers, said the stock market would welcome the normalization of interest rates "if it's occurring for the right, growth-oriented reason.

"And by that I mean higher real rates of interest in terms of forecasting higher real returns on capital with an increase in economic activity. So, in that respect I think the tapering is bullish."

The Fed's 'taper tests'
CNBC's Steve Liesman explains the Fed's view on the economy, and why he believes "it's more likely than not" the Fed will decide to taper in December.

(Read more: Dennis Gartman's top 5 year-end trades)

A reduction in the Fed's bond-buying would likely occur in 2014, Bowen said. "But the zero-interest rate will be in place for longer."

(Read more: The survey says: 'Santa Claus rally')

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.


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