Oaktree Capital Management co-chair Howard Marks favors a Federal Reserve that communicates less frequently and intervenes only when economic conditions become extreme.
“My personal preference is for a less activist central bank that normally lets the economy do its thing, unless it’s in danger of going off the rails, too hot or too cold,” Marks said Sunday on Bloomberg This Weekend.
His comments come as Fed Chair Kevin Warsh looks to reduce the forward guidance that he believes has limited the central bank’s flexibility. The Fed raised interest rates earlier this month as part of its effort to contain inflation.
For investors, less guidance could increase uncertainty around interest rates and asset prices. It also could reward diversified portfolios that can withstand unexpected policy shifts instead of relying heavily on signals from central bankers.
Marks said reduced communication would encourage investors to build more resilient portfolios, a development he views as beneficial for the broader economy.
He also urged policymakers to create a task force examining how artificial intelligence could affect employment, tax revenue and other parts of the economy.
“Now, when they form the taskforce, I don’t know what they can do about it, but it might be nice to think about it,” Marks said. “And you know, if you want one little task to work on, how about this? If people are put out of work, they won’t pay taxes.”
The proposal comes amid growing debate over whether governments and technology companies should introduce additional safeguards as AI capabilities advance.
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