Going by Ben Bernanke's first ever blog post, he may want to title it "The Dovish Daily." Here's how to trade his first installment. The former Federal Reserve Chairman is a fellow with the Brookings Institution, and it announced Monday that Bernanke would be blogging for its site. Bernanke also established a Twitter address: @benbernanke . We doubt he will be live tweeting the "Mad Men" premiere, but it will be interesting to see the frequency at which he posts (and tweets). If you read between the lines of Monday's post (and ask CNBC's senior economic reporter, Steve Liesman, for help), traders could certainly see a dovish bent to the post. First of all, Bernanke's stated purpose for the piece is to defend the Fed's current zero interest rate policy, arguing that the market—not a central bank—determines the direction of bond yields. "In the weak (but recovering) economy of the past few years, all indications are that the equilibrium real interest rate has been exceptionally low, probably negative. A premature increase in interest rates engineered by the Fed would therefore have likely led after a short time to an economic slowdown and, consequently, lower returns on capital investments." Then he goes on to speak about today's conditions and it certainly feels as if he's justifying further accommodating policy. All else equal, investors demand higher yields when inflation is high to compensate them for the declining purchasing power of the dollars with which they expect to be repaid. But yields on inflation-protected bonds are also very low today.... If the Fed were to try to keep market rates persistently too high, relative to the equilibrium rate, the economy would slow (perhaps falling into recession), because capital investments (and other long-lived purchases, like consumer durables) are unattractive when the cost of borrowing set by the Fed exceeds the potential return on those investments." While many investors may be looking past this blog post this morning, it likely would be a different story if Bernanke gave these comments in a speech. But the medium shouldn't matter. He is, after all, likely the second-most influential central banker in history (behind Paul Volcker), and current Chair Janet Yellen is pretty much carrying out the plan of her predecessor. And while the 10-Year Treasury yield climbed as high as 2.24 percent this month, it's back down below 2 percent now. So if this interpretation of Bernanke's blog is correct, interest rates could remain at 2 percent or lower the rest of the year. In order to identify which stocks to buy off this scenario, CNBC Pro turned to our friends at Kensho, who provide a quantitative tool used by hedge funds. The money play: There were more than 40 occasions in the last decade when the yield of the 10-year Treasury fell by 3 percent or more in a 30-day period. Zooming in on winners during these short windows should identify stocks to own in a low-interest rate environment. As far as individual stock winners, it should come as no surprise that General Growth Properties is the best performer, gaining, on average, 7.4 percent during months that have falling rates. REITS become more attractive in low-rate environments because it makes their sizable dividends that much more attractive to investors, not to mention it makes it easier for their tenants to make rent. Lincoln National is the next big winner, followed by Delta Air Lines, CF Industries and Dollar General . CNBC Pro also used Kensho to find which iShares ETFs outperform during a 30-day period of falling rates. The best performer is obvious. It's the iShares 20+ Year Treasury Bond ETF since bond prices rise when rates fall. The second-best performer is the iShares TIPS Bond ETF , which tracks the price of Treasury inflation protected securities and therefore rises in value on fears lower bond rates will spark inflation. The third-best ETF performer was the iShares U.S. Real Estate ETF , which tracks the prices of REITS. The big pet peeve with Bernanke's blog among the many economists and investors contacted for this article is that he ignores the elephant in the room: quantitative easing. They say QE, especially three large rounds of it like what just took place in the U.S, does in fact allow the Fed to dictate the direction of longer term rates ... because it actually buys some longer term securities during that process. Even with that QE omission, Bernanke's blog does seem to hint the Fed isn't moving anytime soon, so investors should adjust their outlook for rates accordingly.
Going by Ben Bernanke's first ever blog post, he may want to title it "The Dovish Daily." Here's how to trade his first installment.
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