Carl Icahn: Low Interest Rates Are Hurting the Economy



Carl Icahn on economic growth

Carl Icahn spoke about his concern for the economy during a CNBC interview. He thinks the slow growth environment is a major concern for the economy. The Fed lowered its key interest rates to support the economy and market after the 2008 (SPY) (VOO) global financial crisis. Icahn believes the rally in the market is an artificial bubble created by the Fed’s lower interest rates and that the Fed has created a false market.

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Now Icahn believes that the economy needs the help of both monetary and fiscal stimulus. He thinks the economy can’t run with a zero interest-rate policy. According to him, the zero interest-rate policy is now losing its efficacy and creating problems for the economy (VFINX) (SPY) (QQQ). Central banks are losing their credibility to spur economic growth. Along with monetary policy, stronger fiscal policy is also necessary to accelerate economic growth.

In his election campaign, Trump promised to invest heavily in infrastructure and defense, build a wall on the US-Mexico (EWW) border, and create jobs. His focus on defense could boost the US defense sector (ITA) (XAR), so investors are eying the sector as a strong investment opportunity. Stocks such as Boeing (BA) and Airbus Group (EADSY) could also benefit.

In the next part of this series, we’ll analyze Carl Icahn’s views on Herbalife.


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