Fed Will Take Interest Rates to Zero, Says Billionaire Investor Kyle Bass
The Federal Open Market Committee (FOMC) could take a final call on lowering interest rates by a quarter percentage point in its meeting next week. But according to billionaire investor Kyle Bass, the bells of a recession could force the committee to consider even zero rates.
The founder and chief investment officer of Hayman Capital Management CNBC that he doesn’t see Fed rate cuts as a viable method to expand the US economy. He predicted a “shallow recession” in early 2020, adding that it would prompt the central bank to cut interest rates to zero. Excerpts:
“We believe rate cuts are less and less effective once you’ve been at a zero rate bound…They will have less efficacy. I think in early 2020, you are just going to see softness in the U.S. economy. We might have a shallow recession, but if we do and we will immediately go to zero rates.”
Need to Know: Hedge-fund billionaire Kyle Bass says the Fed has lost its punch