Business Insider is at the annual Bloomberg Markets Most Influential Summit on Monday, and this year guest after guest has talked about the same worry.
It’s not entirely new, but we’ve never heard it repeated so much before.
Everyone on stage is worried about America’s savers in our current low interest rate environment.
Early in the conference Carlyle CEO William Conway, hedge fund legend Julian Robertson, and William Dudley CEO of the Federal Reserve Bank of New York all voiced their concern separately. Its the band wagon everyone is getting on.
Before the Federal Reserve lowered rates to keep money flowing during the recession, it was easy for people to retire on their savings. The interest on their money could fund visits to grandchildren and tennis club memberships — life was good.
Now, not so.
And the longer rates stay low without a clear sign from the Fed as to when that policy will change, the more people are beginning to think that savers need saving.
While Robertson has been saying this for some time, this hasn’t always been an issue people felt they needed to take up. Now it’s as if there’s a new sense of urgency about it.
“I want to get off the lower bound as soon as possible, in part because it will benefit savers,” said Dudley.
Back in 2012 David Einhorn blasted Ben Bernanke for this issue in a column that used The Simpsons and jelly doughnuts as an allegory for why the Fed’s policy could be unhealthy in the long run.
“I know this isn’t conventional thinking, and it certainly isn’t the way the Fed looks at it, but I believe that raising short rates — not to a high level, but to a still low level of 2 or 3% — would be much more conducive to both growth and stability,” Einhorn wrote.
It’s a different story now. The economy is recovering so an accommodative monetary policy isn’t as necessary to maintain that “growth and stability” Einhorn talked about. Now it’s easier to make the argument that the Fed’s policy is doing more harm than good. Savers are a perfect example of who that harm is impacting.
There’s always something.