Ex-Treasury Chief Paulson Says Low Rates Fuel Asset-Bubble Risk
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Central banks that hold borrowing costs low for a prolonged period raise the risk of asset-price bubbles, former U.S. Treasury Secretary Henry Paulson said.
“Until we get back to a world where interest rates are determined by real economic forces and reflect economic reality, there are going to be asset bubbles,” Paulson said Monday in an interview with Bloomberg Television in London. “There’s going to be volatility and clearly, there are bubbles, so the question is, are they manageable and how big they are.”