‘Helicopter Ben’ May Deter Lending With Lower Rates, Gross Says
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Federal Reserve Chairman Ben S. Bernanke risks causing a decline in longer-term lending by holding down benchmark interest rates, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said in an opinion piece on the Financial Times website.
If the Fed seeks to drive down longer-maturity yields, as some are anticipating, then the central bank may “destroy leverage and credit creation in the process,” Gross wrote in the piece, which was titled “‘Helicopter Ben’ Risks Destroying Credit Creation.” The Fed on Aug. 9 pledged to keep the benchmark rate near zero until at least mid-2013.