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Former Federal Reserve Governor Wayne Angell on whether the Federal Reserve should begin to adjust its policies.
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-- as the minutes from the latest fed meeting show plans to keep interest rates at record lows until 2014.
But.
We have a former fed governor who says the Fed needs to raise rates.
Yes we're saying that to tighten rates to stimulate the US economy how would that work -- wait -- joining us now it up Fox Business exclusive.
Listen -- some people on your side who truly feel that now's the time but.
How would that work at how do you avoid the announcement.
Shocking the markets that yep it's time to tighten.
When interest rates.
Well that bad is doing pretty well and regard true.
The inflation outlook on the short run but -- focusing on employment.
And economic growth they put sure on the wrong thoughts at Ed Koch currently they make it more difficult to make the translation.
-- interest rates do need to move higher I'm not looking for higher interest rates now and certainly not before this election.
Well let's let's talk about something other than interest rates which is another thing the -- has been doing of course is pretty money order by.
Treasury bonds and all kinds of financial instruments mortgage backed securities the Fed now has a balance sheet of two point nine trillion dollars worth of these things.
Is that too much.
Well yes it has because there wasn't necessary.
-- to do that it was necessary.
For the Fed to do water always sure do and that is -- Shura surprised -- -- -- Now we're mirrors a then the Fed should of course not let the inflation.
Run run I had so focusing on its price stability is a -- Jobs.
Would be the first step to raising rates would it be this somehow telegraph the message through.
Fed minutes that come out after about a fed meeting what it's appropriate and when is the appropriate time in your -- the Fed has -- we're gonna keep these low for the next couple of years.
But I know right now that the -- is already set exists and is already there.
They were talking about it translation.
And had transitioned showed eight -- priced -- the Fed should stop.
Promise saying.
That is -- to keep rates low until 2014.
The Fed doesn't know what rates will be needed in 2013.
Or other second -- 2012.
So there's no -- for the Fed to be making that kind of a promise.
Wayne there is some that's gonna happen with the Fed before the election that's on June 30.
Operation Twist comes to an end that is they stop buying these long term.
Bonds and and and -- they decide to do something else that's the end of Operation Twist what happens then when that stops on June 30.
Well not much happens because operation -- Is not very effective now and it wasn't very effective the last time that they had thought about -- had twenty years ago.
And and and there's no there's no indication.
That operation -- works anyway.
So letting operation dressed inspire is a not a very -- Their interest and.
-- you know good to see you -- they are you angry at Ben Bernanke do you think that's a big mistakes have been made.
I know I'm not angry because he's -- The rest of Isabella to -- to get.
The economy worried -- -- out of beta and he certainly has a misdiagnosed.
Goals for the bad.
Wayne Angell former Federal Reserve governor -- great to see -- thank you very much thank you thank you know.
