US lending reaches record high

It could take less than a year before the US Federal Reserve ends its quantitative easing program, says William Poole, former president of the St. Louis Federal Reserve.

Poole has been a leader in warning about the possibility of a bubble in credit that could lead to a financial crash.

Speaking to Euromoney magazine, Poole warned the current cycle would likely be the last one after Fed-induced financial stimulus programs changed the patterns of credit markets.

“I think the period of Fed-induced economic policy, the last window of that kind of easy, quantitative easing, this monster that we haven’t been able to deal with is going to be closed pretty quickly, and you’ll see people in the future moving toward return to some norms in terms of credit pricing,” he said.

Poole has said the current situation could be a microcosm of a bubble that could crash and bring down the global economy.

“I think there’s a real danger that a bubble can collapse at some point in time.”

“So we still have to be attentive to both that possibility and the possibility that there is some significant downward shift in the dynamics of financial markets,” Poole said.

Copyright CNN 2018

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