Sounding more like a physician than a financial analyst, Antulio Bomfim, managing director, Macroeconomic Advisers LLC, Washington, D.C., told an annual meeting of the New York-based American Securitization Forum Inc. (ASF) in Orlando, Florida, this past winter that "the [economy] will recover, but we have to turn off the [life]-support equipment at the right time." That last part was a reference to some federal government programs implemented in the wake of the financial crisis that hit in 2008 to inject added liquidity into the capital markets. "The challenge," according to Bomfim, is "knowing how to tighten [policies] when there are overabundant reserves. Today, the scope is too massive to do it the old way," he argued, suggesting as an alternative that the Federal Reserve permit an interest-rate rise while simultaneously selling assets early in 2012.
