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Tags: JP Morgan | government | war | economy

JPMorgan's Kelly: Government's 'War on Risk' Holding Back Economy

By    |   Thursday, 18 September 2014 09:45 PM

The government and Federal Reserve are hurting the economy by over-disciplining banks and enacting bad policy, says David Kelly, chief global strategist at JPMorgan Funds.

Housing serves as a salient example, he said.

"The reason housing is still weak is because of the combined efforts of the federal government and Federal Reserve to help," Kelly said at an investment conference in Chicago, CNBC.com reports.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

"The federal government . . . is on a witch hunt after the large banks because they decided to assign to the large banks all the blame for what happened in 2008." 

Housing starts plunged 14.4 percent in August, the most since April 2013.

"You really don't want to write a bad mortgage today," because of the government's "war on risk," Kelly said.

Moreover, the government is keeping mortgage rates so low with its mortgage purchases that it's not economical for banks to lend, he said. "This is the part I can't really forgive because it's so stupid."

The 30-year fixed-mortgage rate stood at 4.21 percent Thursday, according to Bankrate.com.

Meanwhile, a recent Business Roundtable survey of 135 of its member CEOs, shows that they too are concerned about the economy.

"While some economic indicators are improving moderately, the results seem to reflect an underperforming U.S. economy held back by policy uncertainty and growing conflicts around the world," Randall Stephenson, chairman of Business Roundtable and CEO of AT&T, said in a statement.

"The economy continues to perform below its potential. . . . We believe Congress and the administration must focus on policies that drive economic growth, including tax reform, immigration reform, trade expansion and long-term fiscal stability."

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

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Finance
The government and Federal Reserve are hurting the economy by over-disciplining banks and enacting bad policy, says David Kelly, chief global strategist at JPMorgan Funds.
JP Morgan, government, war, economy
314
2014-45-18
Thursday, 18 September 2014 09:45 PM
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