A couple weeks ago we told you about the Bank for International Settlement’s annual report that excoriated the Federal Reserve and other central banks for their risky stimulus policies. Now it appears that IMF chief economist Olivier Blanchard is joining them in the opinion that the QE policies lead to immense risk in the markets.
In a recent CNBC interview Blanchard called Japan’s latest stimulus program (known as Abenomics) a very risky program, saying “Abenomics is a very ambitious program — but it’s a very risky one. And it seems to us that at least two of the arrows haven’t quite been totally refined yet.”
Blanchard also noted that the United States was a major risk. “The third risk… is the risk from the exit from quantitative easing in the U.S,” he said. “This can lead to a lot of volatility…. We think the volatility will calm down, but one cannot be sure.”
The takeaway for investors should be that international organizations, never known for their risk aversion, are sounding alarm bells.
