Tags: MidPoint | Steve Beaman | mixed signals | economy | MidPoint

Steve Beaman: 'We're Getting Mixed Signals on Economy'

By    |   Tuesday, 24 February 2015 03:43 PM

Economists have mixed views on the economy now, and there's good reason for that, Steve Beaman, chairman of The Society to Advance Financial Education, told Newsmax TV.

"We're getting mixed signals on this economy constantly," he said on the network's "MidPoint" program.

Beaman noted that the Conference Board's consumer confidence index dropped to 96.4 this month from 103.8 in January, the highest reading since August 2007.

"There's no real assurance that this growth the Fed wants to see before they raise rates is going to be there, so they're backing off a little bit," Beaman said.

Federal Reserve Chair Janet Yellen testified in the Senate Tuesday that the central bank is unlikely to raise interest rates at its March or April meetings.

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"The bet's now September-ish," Beaman said. "We'll have to see if the economy continues to sputter or actually kicks into growth." GDP expanded 2.4 percent last year, the fastest growth since 2010.

On other topics,
  • Sen. Rand Paul's, R-Ky., proposal to audit the Fed, "is a populist idea." Beaman said. "The problem is the Fed walks a fine balance between politicized and not being politicized. The danger of Congress getting its hands into the Fed is that decisions will be made purely on a political basis, not on a financial basis." The Fed's decisions now aren't politicized, Beaman said. "So it's a little bit dangerous. Most of us would like to see where the Fed's money goes. By the same token, we don't want to see congressional involvement in those policies."
  • Fed policy generally works, Beaman said. "If we go to 2008 and 2009, you could argue the Fed created that problem. By the same token, it was clearly the work of [former Fed Chairman] Ben Bernanke flooding liquidity into the global markets that prevented a real global meltdown. So in that sense I guess it did work."
  • JPMorgan Chase's decision to charge large institutional customers fees on some of their deposits will "absolutely" trickle down to smaller customers, Beaman said. "The big banks and financial institutions are really getting hurt by new regulatory costs, and they're trying to squeeze every dollar out they can," he said. "They're going to the high net worth people, because they'll complain the least, and there's really nowhere else for them to go. If you want to hold cash, you hold it in one of the major banks."
  • President Obama's decision to hold financial advisers to a higher standard on retirement accounts — a fiduciary standard — is important, Beaman said. "What that means is a broker for say Merrill Lynch will have to look out for the interest of the client irrespective of his employment by Merrill Lynch," he said. "So the brokers will have to sell products from every firm based on cost and performance, not just Merrill Lynch. That is going to wreak havoc in the big wire houses, the big brokerage firms."
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Economists have mixed views on the economy now, and there's good reason for that, Steve Beaman, chairman of The Society to Advance Financial Education, told Newsmax TV.
Steve Beaman, mixed signals, economy, MidPoint
Tuesday, 24 February 2015 03:43 PM
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