Joe Lavorgnia, chief economist at Deutsche Bank, criticized the Fed’s strategy and sees broad “collateral financial damage” once interest rates eventually edge higher.
“They have the pedal pressed so far down, I just think it’s going to end so badly,” said Lavorgnia on CNBC’s “Squawk on the Street” on Friday. He was commenting on the Fed’s strategy of near-zero interest rates.
Comparing the Fed to a driver speeding on the highway while text messaging, Lavorgnia expects it will “definitely be worse” than the recession in 1994. “We’re seeing various little bubbles pop up in ancillary markets where people are literally reaching for yield. The question is just when does it happen?”
Full article: Fed to Trigger ‘Collateral Financial Damage’: Lavorgnia (CNBC)