‘Zero Percent Interest Rates Work’: Pro

Thursday, 2 May 2013 | 6:06 PM ET
'Zero Percent Interest Rates Work': Pro
Thursday, 2 May 2013 | 5:05 PM ET
What's happening in the stock market appears to be the product of monetary policy more than anything else, says Ted Truscott, CEO of Columbia Management.

What's happening in the stock market appears to be the product of monetary policy more than anything else, Columbia Management CEO Ted Truscott said Thursday.

"I'd boil it down to something quite simple, which is: Zero percent interest rates work," he said. "I used to think that the market was catching up with earnings. Now I think it's zero percent interest rates."

The S&P 500 climbed 14.89 points to close at 1,597.59, earlier hitting a fresh intraday high of 1,598.60.

(Read More: S&P 500 Sets Record High, Closes Shy of 1600; Dow Soars 130, Nasdaq Jumps 1%)

On CNBC's "Fast Money," Truscott said that the signals were clear.

"Don't fight the Fed. Don't fight the ECB. Don't fight the Japanese Central Bank," he said. "I think people are being pushed into understanding that low interest rates are here for a while."

Truscott also offered saw deflation – or fears of it – as playing a role.

"My own personal view is that they have been battling deflation for quite some time. We haven't seen it, but then again, that's the whole point. You don't want to see it," he said.

"How does it end well? Well, it's going to be a challenge to unwind all this pump-priming, if you will, but I think the real battle has been going on of preventing, essentially, what Japan experienced. I think that's been the play for the last four, five years."

Trader disclosure: On May 2, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Dan Nathan is short FB MAY WEEKLY 26/25 PUT SPREAD; Dan Nathan is short XHB MAY 29/27 CALL SPREAD; Dan Nathan is long QCOM; Dan Nathan is short SPY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Tim Seymour is long AAPL; Tim Seymour is long BAC; Tim Seymour is long SBUX; Tim Seymour is long F; Tim Seymour is long TSL; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long GM; Karen Finerman is long M; Karen Finerman is long NNA; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY Puts;

For Pavel Molchanov
Raymond James & Associates makes a market in shares of First Solar, Inc.; Raymond James & Associates makes a market in shares of SunPower Corp.

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