Feldstein Sees ‘Significant Risk’ risk in Treasury bubbles again

Discussion in 'Economics' started by ASusilovic, Aug 29, 2010.

  1. Aug. 27 (Bloomberg) -- The U.S. economy remains “weak” and “fragile” and has a “significant” chance of falling back into a recession, Harvard University economics professor Martin Feldstein said in an interview with Bloomberg Radio.

    “I would say there’s still a significant risk, maybe one chance in three, that there will be a double dip, real GDP falling, before we’re in the clear,” said Feldstein, member of the committee at the National Bureau of Economic Research that dates the beginning and end of recessions.


    The discussions are especially timely because of possible bubbles in Treasury bonds and housing debt that may expose investors to the risk of an interest rate increase, Harvard University Professor Martin Feldstein said during a conference break.

    ‘Big Risk’

    “It could well be that anybody’s who’s buying 20-year, 30- year Treasuries is taking a big risk,” said Feldstein, who chaired former President Ronald Reagan’s Council of Economic Advisers from 1982 to 1984. “Those prices could come down. I think the Fed is keeping those rates below any kind of long-term equilibrium.”


    That´s what I really "like" about economists : today, significant danger of a second recession, tomorrow significant risk in treasury bubbles. Makes sense, hum ?....