Former World Bank President David Malpass: Markets all over need more dynamism

Economic Policy and Central Banks - The Fed needs to consider reforms, particularly regarding quantitative easing (QE), which has not been stimulative and has contributed to wealth inequality [1][2] - There is a call for the Fed to allow more market functionality and to be open to changes, especially concerning stable coins and short-term markets [1][2] - The current high capital gains tax in the US is seen as detrimental to market dynamism, and lowering it could lead to increased investment and growth [1][2][3] Taxation and Growth - Tax cuts are advocated for both the US and Japan to stimulate growth, with Japan's high marginal tax rate of 45% being a concern [1][2] - The idea of a temporary capital gains tax holiday is proposed, suggesting it could lead to a windfall for the government and potentially be extended if successful [2][3] - The impact of tax policies on market behavior is highlighted, with lower tax rates leading to increased equity values as they reflect growth opportunities [2][3] Interest Rates and National Debt - The current short-term interest rates set by the Fed at 4.15% are considered too high, especially in relation to long-term rates, indicating the Fed is behind the curve [3][4] - There is a concern that the national debt is too large, which could affect the demand for dollars, but recent trends show a preference for US assets as gold prices decline [3][4] - A suggestion for a 50 basis point cut in interest rates is made, arguing that the Fed should have started cutting earlier to align with market conditions [4][5]