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Former Federal Reserve Board Governor Mark Olson on the options left for the Federal Reserve to help the economy.
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-- releasing minutes from its.
Last meeting just a couple of hours ago former Federal Reserve board governor and co chair for -- -- risk advisors mark Olson is joining us in a Fox Business exclusive.
Mark you've -- A part of many of those meetings in the past that look at the market reaction when it did look at.
Five year old kid who didn't get that I put the F wanted to -- it started to throw attend her temper tantrum which -- a little bit later but.
The cookie would be in the form of more quantitative easing does it surprise you that we didn't get any clarity on that and do we even need to be thinking.
Along those lines.
The market you -- -- -- -- Identified it exactly right it was more of a temper tantrums there was nothing has happened in the last two weeks since suggested that the Fed would move.
Anywhere differently -- -- from the slight tweaking of the did an operation to west two weeks ago.
-- and so I wouldn't have expected anything in the -- that would have suggested at this point.
That they would do anything more not to expand beyond where they are now would really take.
An enormous.
Expansion of the balance sheet problem that the expansion thus far.
Is is getting about 600 billion or thereabouts by the end of the year will be 600.
And sixty billion you'd have to exceed a trillion to make any significant difference of the academy and so I think that that's that's both unlikely and probably unwise.
The -- look it isn't a liquidity crisis is it if anything banks -- Washington banks are actually.
Contracting there books right now -- getting rid of their non call assays are not lending as much of what exactly can the Fed do.
The that's EU pushing -- a -- at this point liquidity is not a problem corporate America is highly liquid the banks are highly liquid.
That the fact that you see money flowing in interest for example.
Did to some of the of the German.
-- -- issuance.
-- there's a lot of liquidity looking for places to go which I also think explains the current interest.
In the US treasury that the ten year tape.
Is that there's something a lot of liquidity looking for a place that is now a safe harbor.
A safe harbor well but it doesn't feel like a safe harbor is in the past couple of years but.
Looking at all the issues that the Fed has to face right now what should they be doing right now mark.
Well they -- I think that would in the that the part of the statement that hasn't been discussed -- -- -- I haven't heard -- discussed.
-- recently is the fact that the Fed reminded again that there's very little monetary policy can do if congress doesn't address the fiscal issues.
And that statement where it was reiterated.
-- the chairman Bernanke and end.
At -- others vice chairman or -- and I yellen have made that point repeatedly and unless that happens we're gonna continue to see uncertainty and I think the Fed needs to keep reminding people.
But they also ahead of the paragraph that they've always had that the Fed stands ready to move.
In case that they see the economy dipping further remember what we've been through it is is a series of quarters I think we're now up to twelve quarters.
Where were where were we -- in the in the economy expand but the rate of expansion is slowing down it's that that it has declined at the rate of expansion is slowing and.
Out of that problem -- was seeing more evidence out of China the bad economy is.
Perhaps slowing down -- unexpected medical's we've had this overhang from Europe for years now.
I'm -- mentioning it again and then minutes I mean how much is that putting any action taken here when you got these outside forces continuing to drag down the US economy.
While the Euro fought in the -- 05 the Euro countries zero areas a far more than China or the Pacific Graham.
-- China's down from an eleven or 12% growth rate.
Down to an 8% growth rate so that clearly is a diminution but they're still expanding.
A pretty significantly but some of the issues in the Euro -- -- Where they have to look at something what where where there is -- some of the other other southern countries it's been some of their sovereignty is at stake here.
In darted to come up with a with a real answer to it and that's going to be a very difficult problem for the Euro countries to resolve.
I just gotta ask you before we let -- go mark what do you think of -- -- scandal and now of course that some of the focus is shifting to what the Fed knew it whether they could've done something at the time back several years ago.
I think it's one of the -- serious things and that the banking industry has.
I has encountered and I I don't know what the answer is that I don't know what people know but.
But that really shakes the confidence when -- who'll want -- -- standard rate is set by the industry our rate that is used as a standard.
Now for setting all other rates and there there is some question.
As to the veracity.
Of that rate to me that is very serious and I'm glad to hear the regulators and others are looking carefully.
That what the underlying issues are behind it.
One -- the most troubling things I've heard in months from indeed all right mark Olson thank you so much for joining us the soft and and we really.
