- Obama to Outline Strategy to Boost US Exports to Asia
- Friday May See 'Risk Trade' Stalling; Dollar in Focus
- Job Market Politics to Keep Interest Rates Low
- AIG, Symbol of Crisis, Watches Its Stock Zoom Back
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Bill Gates Praises Apple's Jobs for 'Saving the Company'
- Cities With the Most Home Price Reductions
- Is Euphoric Market Ignoring Warning Signs?
- Video Game Sales Plunge, but Have They Hit Bottom?
- EXCERPTS and IMAGES: Warren Buffett & Bill Gates - Keeping America Great
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Gold Is a Bad Inflation Hedge—Like Oil: Stock Picker
- Intel's Andy Bryant Offers An Explanation
- US 'Actively Working' on Weaker Dollar: Fund Manager
- Options Boil on Biotech Buyout Rumors
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- 5-Star Manager's 5 Stocks for Changing Markets
MOST SHARED
- Pharma & Social Media
- Warren Buffett and Bill Gates Share Their 'Optimism' With Eager Columbia Business Students
- Cities With the Most Home Price Reductions
- CNBC TRANSCRIPT: Warren Buffett & Bill Gates - Keeping America Great
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- China Fourth Quarter Growth Could Hit 10%: Official
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Is Euphoric Market Ignoring Warning Signs?
- Obama to Outline Strategy to Boost US Exports to Asia
Text Size 
The Federal Reserve should stop buying government debt and instead focus on kick-starting areas of the credit markets having to do with consumers, Steve Forbes, Forbes CEO, told CNBC Monday.
"Amazingly, since December the Fed's balance sheet hasn't grown one single dollar. The Federal Reserve has been tight-fisted, amazingly, in the last five months," Forbes told "Squawk Box Europe."
"I think the Fed should announce first they're not going to buy any more Treasury securities. Cash in the banking system is not the problem the problem is that parts of the credit economy are still not working," he added.
- Watch the full interview with Steve Forbes above.
The Federal Reserve should "aggressively" buy mortgage-backed securities, to get housing sales moving again, and it should buy packages of credit car loans, car loans and other types of credit, as they promised to do, Forbes explained.
 |
"It doesn't have to balloon its balance sheet, but it does have to pump, literally, hundreds of millions of dollars" into this system to get credit going again, he added.
The US regulators plans for reform, which include making the Federal Reserve a systemic regulator for financial institutions and regulating all derivatives contracts are likely to be hotly debated by lawmakers, according to Forbes.
"In terms of regulation it is a bit ironic they're still going to put new powers in the Federal Reserve, which is an agency that, one, didn't exercise proper oversight over the banking system that it had already under its purview and its lousy monetary policy in 2003 and 2004, when it printed all this excess money, made the bubble possible. I think this is going to be really debated by the US Congress," Forbes said.
On the economy, he said the worst of the recession was over and the financial markets had recovered from the lows hit in March, but the financial system was still not functioning properly as there was very little credit available for small companies and consumers.
Print
Email
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- They may have wrecked their companies or saved our economy. Tell us what you think.
- Big pharma embraces social media, but how much should a tightly regulated sector say on Facebook or Twitter?
- A European dating site finds lovelorn singles from one country to be consistently uglier. Which is it?
- Contributor David Pogue looks at two of the latest efforts to perfect the digital pocket camera.
- PepsiCo is ramping up its onsite health facilities for workers.
Data is a real-time snapshot *Data is delayed at least 15 minutes