BlackRock CEO Larry Fink gets it. Stanley Druckenmiller gets it. Yngve Slyngstad, manager of the world’s largest sovereign wealth fund, Norges Bank Investment Management, gets it too. The world’s central banks don’t seem to appreciate the risks they have created in the global financial system by holding interest rates at zero for years now. Might it be that the world’s central banks are dominated by far too many academic economists and far too few practitioners of economics, you know the men and women who buy things, start businesses, and make loans and investments? Many practitioners will tell you the Fed has well overstayed its welcome. Yet many at the Fed seem to believe if only they can pull a little bit more consumption and investment from the future into the present (the only way monetary policy stimulates growth), the economy will boom. That argument is running a little thin after almost 7 years of zero percent interest rates, wouldn’t you say?
Jeremy Jones, CFA
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