May 24, 2016

AESTHETICS, NOT ECONOMICS:

Fed Shouldn't Kid Itself on Rate Risk, Says $200 Billion Manager (Emma Orr and  Katherine Chiglinsky, May 23, 2016, Bloomberg)

Federal Reserve policy makers must appreciate the danger that higher interest rates could hurt the U.S. economy by strengthening the dollar and pressuring global growth, said Krishna Memani, chief investment officer of OppenheimerFunds Inc.

"That reaction is going to be negative," he said Monday in a Bloomberg Television interview. "The Fed can't kid itself on that." [...]

"It's a risky move, but they're at a better place this time around than they were last year," Memani said. "The trick for them is to prove to the market that this is not a sustained rate rise."

So the key is to convince us that they recognize they're making a mistake in economic terms.

Posted by at May 24, 2016 3:19 PM

  

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