Oaktree's Marks Says Time for Fed to Stop Suppressing Rates

Years of "unnaturally low" interest rates create an environment that distorts capital markets and penalizes investors, according to Howard Marks of Oaktree Capital Group LLC.

"I wish the government would get out the business of setting rates, and I wish rates would stop being unnaturally low," Marks, co-founder of Oaktree, the world’s biggest manager of distressed debt, said in a television interview Tuesday on "Bloomberg <GO>" with David Westin and Stephanie Ruhle. "The problem is that the Fed should stimulate the economy when it is very weak and then get out of that business."

He said Federal Reserve policy makers have refrained from raising rates above zero, where they’ve held them since 2008, because they’re worried about "softness" in the economy.

Data last week showed that payrolls rose less than projected in September, wages stagnated and the jobless rate was unchanged. Futures traders have been trimming bets the Fed will boost rates this year even as officials including Chair Janet Yellen and New York Fed President William C. Dudley have said they expect to act in 2015.