The Federal Reserve’s reckless monetary policies have distorted financial markets, laying the groundwork for a possible U.S. economic collapse or stock market crash in 2015.
At least, that’s the opinion of Republican presidential candidate Rand Paul. In a speech at Morningside College in Sioux City, the Kentucky Senator argued low interest rates enacted by central bankers have failed to stimulate the U.S. economy and potentially created a stock market bubble. (Source: Radio Iowa, July 1, 2015.)
“Right now we’re still keeping interest rates at zero and the boom isn’t in housing this time, but it may well be a boom in the stock market,” he told the packed auditorium. “What happens when people come to the realization that we’ve maybe overinflated the stock market again?”
After the financial crisis in 2008, the Federal Reserve lowered the federal funds rate near zero. Many economists have vocally supported the Fed’s actions, arguing such measures were needed to stabilize the financial market and stimulate the economy.
Paul, however, contends such low interest rates have created huge distortions in the economy. Once central bankers remove their loose monetary policies, the consequences for financial markets could be severe.
“People say, ‘Oh, we can just do that forever,’” Paul continued. “I don’t think so. I think there’ll be a day of reckoning.”