How the Fed’s Low Rates Became an Addiction

How the Fed’s Low Rates Became an Addiction

Fergus Hodgson, July 10, 2019

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A key tenet of central banking around the world is the dogma that deflation impedes economic growth and must be avoided at all costs.

Peter Boockvar, chief investment officer with Bleakly Advisory Group and editor of the Boock Report, is a prominent dissenter. He points out inflation targets make no economic sense until you consider who benefits from them.

Wall Street has captured the Federal Reserve, he argues, which cannot abandon loose monetary policy for fear of upsetting the status quo. However, perpetual low rates are no longer incentivizing new economic behavior, and a painful but necessary market correction will come.

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