James Rickards: Fed Tapering Pause Likely in June

Thursday, 13 Feb 2014 07:48 AM

By Dan Weil

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Sluggish economic data will likely lead the Federal Reserve to interrupt the tapering of its quantitative easing in June, says James Rickards, manager of West Shore Funds.

The Fed has tapered twice so far — by $10 billion at both its December and January meetings. The central bank's new Chair Janet Yellen said in congressional testimony Tuesday that the tapering process won't be curtailed unless there's a "notable [negative] change" in the economy.

"The Fed will say the policy is data dependent, which it is," Rickards told Yahoo. "But the data has been coming in weak, so I would expect a pause by mid-year, probably in June."

Editor’s Note:
Secret ‘250% Calendar’ Exposed — Free Video

Yellen wouldn't take the radical step of trying to halt the tapering in March, at the first meeting she chairs, says Rickards, author "Currency Wars: The Making of the Next Global Crisis" and the forthcoming "The Death of Money: The Coming Collapse of the International Monetary System.".

He expresses strong disdain for the Fed's policymaking abilities. "The Fed has missed every bubble for the past 20 years," he said.

"The Fed has a terrible forecasting record. They're always surprised. They've been making it up for the last five years. They're going to keep making it up. They don’t know what they're doing."

Meanwhile, economist Judy Shelton, co-director of the Sound Money Project at the Atlas Economic Research Foundation, criticizes Yellen's emphasis in congressional testimony Tuesday on the need to raise inflation to 2 percent.

That "means her definition of price stability would let the dollar lose more than 20 percent of its value each decade," Shelton wrote in The Wall Street Journal.

Editor’s Note: Secret ‘250% Calendar’ Exposed — Free Video

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