Young Traders, Fed Rate Hikes, Oh My!

Another reminder of how far removed the financial world now is from what might have been considered normal comes via this Bloomberg story that asks the question of how those new to Wall Street – who only know zero percent interest rates – might react to the first Federal Reserve tightening cycle in a decade, starting sometime later this year (if all goes well).

I never grow tired of looking at former Fed Chief Alan Greenspan’s 2004-2006 “baby steps” normalization campaign that simultaneously restored interest rates to normal levels while fostering the biggest asset bubble(s) known to Man.

The fact that one-third of Wall Street traders only know ZIRP will probably be the least of the financial world’s problems if rates ever do rise significantly since “too low for too long”, while never being acknowledge by central bankers as playing any role in asset bubbles, will surely  lead to all kinds of new and interesting developments.