Marc Faber, publisher of the Gloom, Boom & Doom Report, isn't too impressed with the Federal Reserve's tapering of its bond purchases, which the Fed will likely agree to continue in its policy meeting Wednesday.
Faber focuses more on the fact that Fed policy overall remains extremely accommodative, with short-term interest rates near zero and the central bank's balance sheet at $4.3 trillion.
"It's a catastrophe,"
he told CNBC. "What the Fed has done is to lift asset prices, and the cost of living. In the meantime, the cost of living increases are higher than the wage increases. The typical American household income is going down in real terms."
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Consumer prices rose 2.1 percent in the year through May, while compensation for civilian workers increased 1.8 percent in the 12 months ended March 31.
Faber says Fed policy is worsening income inequality. "The Fed is boosting asset prices. It leads to less affordability, people can't buy their homes anymore in the lower income group," he said.
"The more they print, the more inequality there is, the weaker the economy will become."
Meanwhile, former Fed Vice Chairman Alan Blinder believes that disagreements between Fed policymakers over how fast to raise interest rates and shed assets will hurt the bond market.
"I worry about disruptions in the financial markets, as the Fed starts making more and more noises about exit strategies of various sorts,"
he told MarketWatch.
"I think there is likely to be a vocal debate over that. And that will hurt [boost] interest rates. It might hurt stock prices too, but it will certainly hurt interest rates."
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