World Bank Chief Economist Warns Fed To Delay Rate Rise

[Purveyor]

Source: Financial Times

The US Federal Reserve risks triggering “panic and turmoil” in emerging markets if it opts to raise rates at its September meeting and should hold fire until the global economy is on a surer footing, the World Bank’s chief economist has warned.

Rising uncertainty over growth in China and its impact on the global economy meant a Fed decision to raise its policy rate next week, for the first time since 2006, would have negative consequences, Kaushik Basu told the Financial Times.

His warning highlights the mounting concern outside the US over the Fed’s potential “lift-off”. It follows similar advice from the International Monetary Fund where anxieties have also grown in recent weeks about the potential repercussions of a September rate rise.

That means that if the Fed’s policymakers were to decide next week to raise rates they would be doing so against the counsel of both of the institutions created at Bretton Woods as guardians of global economic stability.


Read more: http://www.ft.com/cms/s/0/e5142190-5630-11e5-a28b-50226830d644.html#ixzz3lCCMxKWP

[PatrickforO]

1. Well, we'll see what happens.

Basically, the entities that own the most interest in the Fed are Citi and JP Morgan Chase. They want to make higher profits, and historically have not cared much who is hurt in this inexorable quest for MORE. But now the World Bank and the IMF are warning them not to.

It should be interesting to see how this plays out.

[Purveyor]

2. The FED wants to raise the rates to give them some leverage

when the next banking crisis hits.

As it is now with interest rates near zero, there is not much they can do but sit back and watch.

Perilous times, imo.

[PatrickforO]

3. It is with know nothing Republicans in office.

The government should be the spender of last resort in times of recession so that demand for goods and services remains high and more layoffs don't occur. The quantitative easing by the Fed did less for Main Street Americans than a second stimulus would have.

But, I'm with you - these CLOWNS are again threatening to shut down the government. Or perhaps I should say traitors, because in my opinion that's what they are. Not to mention idiots who have no clue how a national economy even runs.