CNBC’s Ron Insana warns that if the Federal Reserve hikes rates anytime soon, it would be a disaster for the economy.
“Higher interest rates from the Fed will simply not be the proper medicine for structural, or secular, price pressures and could seriously jeopardize what little growth we have,” he wrote for CNBC.com.
Fed Chair Janet Yellen told a global monetary policy conference that the case for a rate increase had grown stronger, while Fed Vice Chair Stanley Fischer suggested a move could come at the central bank's September policy meeting if the economy was doing well.
Although U.S. government data earlier on Friday showed the economy growing only sluggishly in the second quarter, Yellen said a lot of new jobs were being created and economic growth would likely continue at a moderate pace.
"I believe the case for an increase in the federal funds rate has strengthened in recent months," Yellen said in a speech at the Fed's annual monetary policy conference in Jackson Hole, Wyoming.
But Insana says now is not the time - the nation essentially hasn't been cured of what ails it.
“The problems we face today are more political than economic. The U.S., indeed the world, lacks a credible blueprint for pushing growth back toward its historical potential,” he wrote.
“Economic policy, both at home, and abroad, needs to become more coordinated, more comprehensive, more coherent and more growth-oriented than it has been in any time in recent memory. And it needs to happen now!” he urged.
Insana urged the Fed, the White House and Congress "to convene an economic summit, which includes banking and business leaders, to identify how best monetary, fiscal and regulatory policies can be harmonized" to bolster economic growth.
“And it needs to produce an action plan that moves quickly and decisively forward,” he wrote.
“If we fail now, irrespective of political gridlock and chaos before us … instead of a lost decade, the U.S., one day, may very well lament the loss of an entire generation,” he wrote.
“And we will only have ourselves, and our generation's leaders, to blame.”
For her part, Yellen said the Fed already thinks it is close to meeting its goals of maximum employment and stable prices, and she described consumer spending as "solid" while noting business investment was weak and exports had been hurt by a strong U.S. dollar.
But she did not give guidance on what the central bank needs to see before raising rates. Following her remarks, investors continued to bet there were roughly even odds of an increase at the Fed's December policy meeting.
"She's just kept the door open for a hike sooner rather than later," said Subadra Rajappa, an interest rate strategist at Societe Generale in Washington.
(Newsmax wire services contributed to this report).
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