Martin Feldstein, a professor of economics at Harvard University, talks about the impact of Federal Reserve monetary policy on the stock market. Feldstein, speaking with Sara Eisen on Bloomberg Television’s “InsideTrack,” also discusses the outlook for the U.S. economy.

May 2 (Bloomberg)

Category: Video

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4 Responses to “Martin Feldstein Says We Have a “Fed Fueled Stock Bubble””

  1. ironman says:

    Well, that’s just silly. Outside of the periods of QE 1.0 and QE 2.0, we’ve seen very little of Fed policy affecting stock prices in a way that might reasonably be described as a bubble (as properly defined here.)

    It certainly doesn’t describe the current state of the market, where investors are reacting to recent changes to their expectations for the future coinciding with the latest earnings announcements (that affects the very near term), which will turn a quite different direction as the long term future continues to follow a different trajectory.

    That’s not a bubble popping – that is investors continuing to react in a very orderly manner with respect to their fundamental expectations for the returns from the equities in which they invest at specific points of time in the future.

  2. Futuredome says:

    A Republican saying this. After Romney gets elected, time to jack rates sky high like they want………whoops.

  3. AHodge says:

    Wasnt that the idea? but i respect Martin more than any R except Calomiris and Penner — he is partizanly stupified about regulation

    in mid 2008 he had just given a speech including QUOTE “There is plenty of blame to go around for the current situation. The Federal Reserve bears much of the responsibility, because of its failure to provide the appropriate supervisory oversight for the major money center banks. The Fed’s banking examiners have complete access to all of the financial transactions of the banks that they supervise, and should have the technical expertise to evaluate the risks that those banks are taking. “Examiners… overstated the quality of the banks assets”. UNQUOTE

    Later after another speech of his, I ask him about this (including much more) call for better regulation.

    I note friends were surprised he was making such an active call for better regulation. He seems taken aback. Then said he thought supervision different than regulation, and he was still against most regulation. I say to myself, Well whatever Martin, call it what you want, as long as you are for it….

  4. [...] elections. Alan Greenspan says stocks are “very cheap,” while Martin Feldstein says we have a Fed-fueled stock bubble. Lance Roberts says monetary and fiscal policies have little effect on when recessions [...]