UBS: The Secret Reason The Fed Is ‘Tolerating’ Bubbles

Testosteron Pit reports:

Swiss megabank UBS, one of the great beneficiaries of the Fed’s policies, ponders in its latest FX Comments how to deal with asset bubbles, “most importantly in housing markets,” a topic that is a “hotly debated issue among central banks.”

Turns out, after nearly six years of printing money and inflicting ZIRP and financial repression on most developed economies, thus creating these asset bubbles in the first place, central bankers find themselves “essentially in an experimental phase.”

Shouldn’t they have thought about this before? It seems. But publically, the Fed and other central banks are still vociferously denying that there are any asset bubbles. In fact, the Fed prides itself in having “healed” the housing market: prices in many cities, including San Francisco, are now substantially higher than they were at the craziest peak of the last housing bubble.

So in this environment of pandemic central-bank bubble-denials, UBS writes that “policymakers around the world are struggling with potential asset bubbles” that are “a logical and inevitable consequence of historically unprecedented monetary policies.”

It took nearly six years to figure this out?

Will their be another housing bubble?