Many Economists Say Fed Shouldn't Delay Raising Rates

Monday, 18 Aug 2014 05:44 PM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Given the recent quiescence of inflation and some sluggish economic data, the Federal Reserve may refrain from raising interest rates until at least the second quarter of next year.

In a recent Wall Street Journal survey, 30 economists voice concern that the Fed will wait too long to hike rates, and just three are worried the Fed will act too soon.

The Fed has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

The central bank's favored inflation measure, the personal consumption expenditures price index, rose 1.6 percent in the 12 months through June, well below the Fed's 2 percent target.

Meanwhile, retail sales were unchanged in July, the worst performance in six months.

Still, some maintain that the Fed is too dovish. "They are making me nervous," Arun Raha, chief global economist for industrial manufacturer Eaton Corp., told the Journal.

"Given the strength of the job market, manufacturing and non-residential construction, it's about time they got rid of their low-rates-for-an-extended-period viewpoint."

Nonfarm payrolls climbed 209,000 in July, the sixth straight monthly gain of more than 200,000. That's the longest streak since 1997.

Meanwhile, Joseph LaVorgna, chief U.S. economist at Deutsche Bank, says that a spate of strong economic data could quickly change the Fed's tune to a more hawkish one, jolting investors. 

"If the numbers change and the Fed rhetoric all of a sudden changes, they're not going to care whether investors feel like the rug got pulled out from underneath them," LaVorgna told CNBC.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

Related Articles:

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

WSJ's Mattich: The Currency War is On

Sunday, 23 Nov 2014 23:26 PM

With many economies outside the United States struggling, the European Central Bank, the Bank of Japan and now the Peopl . . .

USA Today's Waggoner: It May Be Time to Buy Gold, or Maybe Not

Sunday, 23 Nov 2014 20:17 PM

With gold having dropped to a four-year low earlier this month, is now the moment to jump in? John Waggoner of USA Today . . .

Yale's Roach: China Wrestles with 'Downside Pressure'

Sunday, 23 Nov 2014 19:56 PM

China's interest-rate cut Friday shows it seeks to keep economic growth from slipping below 7 percent, says Stephen Roac . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved