The US Federal Reserve chief Jerome Powell has made a decision to keep interest rates low amid a grim economic outlook. RT’s Boom Bust talks to Octavio Marenzi of Opimus LLC about the decision.
“They are pumping money into the economy at furious rates, debt is increasing very rapidly, and that debt is simply being monetized by the Fed buying it up,” Marenzi says. “So, if you keep doing that for too long, and particularly if you sort of inject the cash directly into the general economy, you do run the risk of inflation.”
According to the analyst, “The Fed has painted itself into a bit of a corner because I think they are fully aware that the markets, the equities markets and the bond markets have become very dependent on this flow of very low interest rates and this flow of money coming in.”
Marenzi warns that “if they start to even think about increasing interest rates, there’s a big risk the markets will crash.”
Source: RT