Tuesday, December 14, 2010
Paul's Harsh Comments and Upcoming Humphrey-Hawkins Testimony in February is Bound to Whipsaw Markets; Volatility Eyed ..
In an interview with CNBC, the Texas Republican complained that the Federal Reserve's monetary policy caused the financial crisis, adding that the worst may be yet to come.
"I don't believe we are anywhere near the end of this [crisis], Paul said. "We're about to see the collapse of the bond bubble, with skyrocketing interest rates and inflation, and that will be a whole new ball game for us to face."
In the wake of the Fed's decision to maintain its $600 billion bond-buying program, yields on the benchmark 10-year Treasury note touched 3.494%, their highest level in more than six months. Treasurys prices, which trade inversely to yields, have sank as investors shed safe-haven assets in anticipation of an economic recovery.
The iconoclastic congressman, a fierce critic of the Fed, pointed to the central bank's policies as the cause of the economy's troubles. He reiterated his long-standing demands of more transparency and stronger oversight of the Fed.
"We need to ask more questions, then we should have a real audit of the Fed," he said.
-By Javier E. David, Dow Jones Newswires; 212-416-4564; firstname.lastname@example.org
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(END) Dow Jones Newswires
December 14, 2010 17:42 ET (22:42 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.- - 05 42 PM EST 12-14-10
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