Joe Lavorgnia, chief economist at Deutsche Bank [ DBK-DE 33.90 -0.94 (-2.70%) ], criticized the Fed's strategy and sees broad "collateral financial damage" once interest rates eventually edge higher.
"They have the pedal pressed so far down, I just think it's going to end so badly," said Lavorgnia on CNBC's " Squawk on the Street " on Friday. He was commenting on the Fed's strategy of near-zero interest rates.
"When rates go higher, they're going to go so much higher than people anticipate and it's going to cause so much collateral financial damage," Lavorgnia said.
Comparing the Fed to a driver speeding on the highway while text messaging, Lavorgnia expects it will "definitely be worse" than the recession in 1994. "We're seeing various little bubbles pop up in ancillary markets where people are literally reaching for yield. The question is just when does it happen?"
Agreeing with Lavorgnia's position, Art Hogan, analyst at Lazard Capital Markets [ LAZ 45.81 -0.31 (-0.67%) ], said on a monthly basis he sees 2013 being the year when the Fed "starts trimming back on quantitative easing." He thinks they'll do it "long before" unemployment reaches 6.5 percent, which he thinks may not happen until the second half of 2014.Page 1 of 2 | Next Page