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Crescenzi: Bond investors parry with 3 Musketeers

If you're nearing retirement and a sizable portion of your portfolio is in bonds, your financial future is pegged to the opinions and whims of only three people: Janet Yellen, Stanley Fischer and William Dudley, Pimco's Tony Cescenzi said Thursday.


Tony Crescenzi
Adam Jeffery | CNBC
Tony Crescenzi

That is, as the chairman, vice chairman and president of the Federal Reserve Bank of New York, their interpretation of economic data, and the decisions they make based on the data, influence bonds far more than anything else, including fundamentals.

"They're the core leaders," Crescenzi said on CNBC's "Power Lunch," referring to them as the "Three Musketeers" and adding that their decisions ripple across the globe. "It's a little discomforting."

Crescenzi would prefer that moves in interest rates reflect fundamental changes.

However, he quickly added, "Congress is doing nothing," meaning that people elected to public office have not actively addressed the weak economy. Therefore, it comes down to Crescenzi's Three Musketeers. "The Fed may not be doing things we like, but nobody else is doing it."

In turn, decisions of only three people have a tremendous impact on the financial well being of millions of Americans, and, those people, necessarily, have an agenda.

"Plus there's no way to know what they're thinking," Crescenzi added, meaning that their opinions may change long before those changes are ever communicated.

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If you're a pro and you trade bonds, Crescenzi had a little advice. He said Pimco is telling clients not to get wrapped up with when the Fed moves. "What matters is how much and how fast."