Fed’s Jay Powell creating ’zombie’ firms, says noted Fed watcher
September 7, 2020 – by Erin Arvedlund
Is the Federal Reserve’s lower-for-longer interest rate policy worsening the income divide and benefiting Wall Street, not Main Street? Is it actually thwarting innovation in the markets?
Yes, concludes Danielle DiMartino Booth, CEO and chief strategist for Quill Intelligence, a research and analytics firm and newsletter publisher. Before starting her own firm, DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas, where she served as adviser to Fed president Richard W. Fisher throughout the 2008 financial crisis. She’s the author of Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America (Portfolio).
Under current Fed Chair Jerome Powell, “effectively the Fed wants cover for running loose monetary policy longer than ever,” she said in an interview.
David Kotok, co-founder of Cumberland Advisors, a fixed-income investment firm in Sarasota, Fla., knows DiMartino Booth and admires her “sharp, centrist” views. However, “It’s always easier to criticize the Fed with a retroactive view,” he said.
He’s not as concerned about the Fed’s exploding balance sheet.
“My view is that the CARES Act should be many more trillions of dollars,” Kotok said. “We need the equivalent of a Marshall Plan” for the United States, similar to the rescue plan for Europe after World War II.
Read the full article at: The Philadelphia Inquirer
Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.
Sign up for our FREE Cumberland Market Commentaries
Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.