Jim Grant, prominent author of Grant’s Interest Rate Observer
Grant has been a particularly tough critic of the central bank, which he says has caused a lot of damage to the economy and markets over the years, most of which he says was “unintended but not entirely unforeseeable.”
The respected author and market pundit says a period of artificially low interest rates that hovered at or near 0% gave root to the challenging environment that many investors are wrestling with now.
Grant makes the argument that the Fed’s balance sheet resembles that of banks like First Republic.
“So the Fed, of course, isn’t the First Republic Bank but its balance sheet resembles that of First Republic and Silicon Valley Bank, in that it is earning 2% on its assets and paying 4-5% on its liabilities,” he said.
MarketWatch 14 May 2023
James Grant: Return-free risk
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