Low US rates the problem, no longer the cure

Bill Gross was again in the spotlight last week, saying US rates at zero were now the problem and not the cure for the post GFC economy. He said the Federal Reserve is beginning to recognise “zero interest rates increasingly have negative, as well as positive consequences.” He thinks the US Federal Reserve and the BoE are “wising up…the Taylor rule and any other standard signal of monetary policy must now be discarded into the trash bin of history” and that’s why the US will get a rate rise shortly. “There is no statistical reason per se for the Fed to raise interest rates, yet absent a major global catastrophe we are likely to get one in September.”