“In its increasingly desperate attempts to steer the US economy away from deflation, the Federal Reserve Board is blatantly encouraging increased leverage and speculation. Having almost exhausted the potential to cut short-term interest rates, the Fed’s focus is now on flattening the yield curve by pushing down long-term rates. The Fed’s strategy is to make an explicit commitment that short rates will be held down for an extended period, bolstered if necessary by purchases of long-term securities,” writes Martin Barnes in the Financial Times.
Cheap Money Means a Bond Bubble
