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Sam Zell: Interest Rates Need a ‘Shot Clock’

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                Sam Zell: Interest Rates Need a 'Shot Clock'

Real estate billionaire Sam Zell says the Federal Reserve has been wasting precious time in getting interest rates back to the level they belong.

“The kinds of interest rates we’ve had are like basketball without a shot clock,” The Real Deal.com quoted the billionaire chairman of Equity Group Investments as recently saying. “There’s no sense of urgency. There’s no penalty in deferring making a decision,” he said.

Zell also said he’s bullish on foreign investment but doesn’t have much hope for an infrastructure boom under the Trump administration.

“The only way we’re going to get anything done on infrastructure is if we’re able to superimpose the benefits and objectives of the whole country over those of the tree-huggers,” he said, referring to the scores of environmental studies that come with major building projects, Real Deal explained.

 “The reality is, saving the trees when the rest of society can’t function — or you can’t cross the bridge to get to the trees — is, I don’t think, a winning formula,” he said.

Meanwhile, a centrist Fed policymaker said that with the U.S. economy having now "largely attained" a full recovery from recession, the Fed can raise interest rates three or more times this year.

San Francisco Fed President John Williams, who largely repeated his view that the U.S. central bank should continue tightening policy gradually, said the main obstacles to raising economic output are now largely outside of the Fed's realm of influence: the slow growth in new workers in the labor market and in their productivity on the job, Reuters reported.

He said such supply-side impediments to pushing overall economic growth above its current 2-percent rate are for lawmakers and business leaders to tackle, not the Federal Reserve.

Lifting rates gradually "prevents the economy from overheating… I would not rule out more than three increases total for this year," Williams told an economists' club in New York.

"With an economy at full employment, inflation nearing the Fed's 2 percent goal, and the expansion now in its eighth year, the data have spoken and the message is clear: We've largely attained the hard-sought recovery we've been after for the past nine years," added Williams, who is close to Fed Chair Janet Yellen and who regains a vote on the Fed's policy committee next year under a rotation.

Earlier this month the Fed lifted rates a notch, its third tightening since the 2007-2009 financial crisis and recession. Forecasts from Fed officials suggest a median of two more hikes are planned before year end.

Williams expects economic growth of around 1.75 percent this year and next, a bit below his colleagues, and for inflation to hit 2 percent in the next year or so.

(Newsmax wire services contributed to this report).

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Sam Zell: Asset Markets, Fueled by Central Bank Easing, at Risk of Major Corrections
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