December 30, 2013

Secular challenges to economy

I strongly suspect that a withdrawal from the interest rate addiction and a seamless transition ("Goldilocks") toward more normalized long-term interest rates will result in renewed pressures on economic and corporate profit growth and lower equity prices.

In the end, let's not lose sight of the fact that we are nearly five years into an economic recovery, and we are still very much on monetary life support. This underscores the secular challenges that have produced and will continue to produce sub-par growth despite short-term interest rates anchored at zero.

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