UBS chief Axel Weber says the U.S. economy faces trouble down the road
money.cnn.com / By Mark Thompson / January 23, 2013: 8:32 AM ET
Relying on the Federal Reserve to shore up the economy while agreeing to short-term budget deals risks storing up trouble for the United States down the road, Axel Weber, chairman of Swiss bank UBS, said Wednesday.
Weber, former president of Germany’s Bundesbank, said quantitative easing to pump cash into developed economies had been the right policy from 2007-2010, but it had helped create the impression that central banks were “the only game in town”.
“Central banks can only do certain things,” he said at the World Economic Forum in Davos, Switzerland. “Deeper issues are still there.”
The Fed has indicated it intends to keep buying assets such as Treasuries in order to stimulate the economy until the labor market improves “substantially.”