Expert Warns Fed Policy Risks Fueling Another Economic Crisis
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Consensus view is that the US economy will have a soft landing, but consensus is often wrong (e.g. 2007 housing downturn).
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Bernard Connolly argues central bank models ignore risk and intertemporal coordination, causing crises.
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Fed kept rates too low in 1990s and 2000s, fueling bubbles that led to crashes when rates rose.
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Connolly says economy still trapped in disequilibrium, requiring endless bubbles and low rates.
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He predicts another crisis soon when long rates converge with short rates, necessitating more rate cuts.