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Aug. 24, 2019, 11:45 a.m. EDT

Kyle Bass on where the global economy is headed: ‘This is insane’

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By Shawn Langlois, MarketWatch

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Kyle Bass

‘This is insane. The Japanese are going to keep going. The Chinese print money like it’s a national pastime today. Europe is going to restart QE.’

That’s Hayman Capital Management fund manager Kyle Bass talking on CNBC Tuesday about how monetary easing is catching fire around the world and will eventually bring U.S. interest rates all the way down to zero.

“We’re the only country that has an integer in front of our bond yields,” he said. “We have 90% of the world’s investment-grade debt. We actually have rule of law and we have a decent economy. All the money is going to come here.”

Expectations are calling for lower rates again in the U.S. next month, following a cut of 25 basis points in July, according to the CME Group’s FedWatch tool.

When rates eventually reach zero in the U.S. amid slowing growth in Europe and China, Bass warns, it will only fan the flames of inequality in America.

“The unintended consequences of central bank printing are that it makes the rich even richer, it makes the middle class stay where they are and it makes the poor stay poor,” Bass explained to CNBC.

Watch the full interview:

It’s been a rocky stretch for the stock market of late, but Tuesday’s session was relatively mild as the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.0025% and the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.14% were both down less than 1%, at last check.

US : Dow Jones Global
-0.74 -0.0025%
Volume: 197.43M
Jan. 23, 2020 3:33p
+4.67 +0.14%
Volume: 1.36B
Jan. 23, 2020 3:33p

Shawn Langlois is an editor and writer for MarketWatch in Los Angeles. Follow him on Twitter @slangwise.

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