It Didn’t Have to Be This Way
Stephen Roach talks to Kelly Evans of CNBC about how the Federal Reserve is currently making the same mistake it made during the last two asset bubble inflations.
Coming up on the 10-year anniversary of this blog in March, it’s worth pointing out that Roach graced the very first post (on the old blog), noting the following:
“It didn’t have to be this way. The big mistake, in my view, came when the Fed condoned the equity bubble in the late 1990s. It has been playing post-bubble defense ever since, fostering an unusually low real interest rate climate that has led to one bubble after another. And that has given rise to the real monster — the asset-dependent American consumer and a co-dependent global economy that can’t live without excess US consumption. The real test was always the exit strategy.”
Not much has really changed at the Fed, or so it seems…