Einhorn Finds Dinner Chat With Bernanke ‘Frightening’ - Bloomberg
Bernanke responded “you are wrong” to a question about the diminishing returns of having interest rates at zero, according to the hedge-fund manager. The ex-Fed chief’s explanation, Einhorn said, was that raising interest rates to benefit savers wouldn’t be the right move for the economy because it would require borrowers to pay more for capital.
The Fed’s actions during the financial crisis have been praised by investors including billionaire Warren Buffett for helping the U.S. recover from the deepest slump since the Great Depression. Last year he described the Fed as “the greatest hedge fund in history” because of the money it’s generating for the government from its bond-buying program.
“I’m not sure that is meant as a compliment,” Einhorn said in response to a question about Buffett’s remark.