Stephen Schwarzman, chief executive officer of Blackstone Group LP, the world’s biggest buyout firm, said additional quantitative easing by the U.S. Federal Reserve won’t have much of an impact on companies.
“It’s unclear to me, and I’m not an economist, but it’s not an enormous incentive to do something different with your businesses because rates are down a few basis points,” Schwarzman said yesterday in an interview with Bloomberg Television’s Margaret Brennan at the UBS Wealth Management Roundtable in New York. “Money’s already quite cheap.”
The Fed is considering debt purchases as a way to boost economic growth and lower unemployment as the benchmark interest rate remains near zero. The so-called quantitative easing, which could exceed $500 billion, is aimed at lowering long-term rates.
Paul Tudor Jones, founder of the $11.5 billion hedge-fund firm Tudor Investment Corp. in Greenwich, Connecticut, said in an investor letter last week that a revaluation of China’s renminbi would do more to cut unemployment than asset purchases by the Fed. Colm O’Shea, who runs London-based hedge fund Comac Capital LLP, told investors in August that the Fed would “risk its credibility” with a second round of quantitative easing.
Clifford Asness, who runs Greenwich-based AQR Capital Management LLC, said he doesn’t expect any long-term effects from such a move.
“Us printing money to buy our own bonds I don’t think can matter long term,” Asness said this week in an interview with Bloomberg News at the Buttonwood Gathering, a conference organized by The Economist magazine in New York.
Jeremy Grantham, chief investment officer of Grantham Mayo Van Otterloo & Co. in Boston, said in a quarterly letter to investors that the Fed’s quantitative easing will be a “more desperate maneuver than the typical low-rate policy.”
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