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Former Federal Reserve Vice Chairman Alan Blinder on whether the Fed will take further action to help the economy.
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Then the first day that that -- reserve meeting that that is gonna announce -- next that's tomorrow but doesn't still have more tools.
To get the US economy got mine Alan Blinder is the former vice chairman of the Federal Reserve will -- to have him join us now in this first on Fox Business interview.
Sure it's wonderful to have you.
What should we expect to hear from the Fed tomorrow.
Well you know I think this is a very close call this is like one of those -- the nickel on it lands on its edge.
You may hear nothing picks -- some words about that their.
You know ready to do things if necessary or you may hear some further steps I think it's about a 5050 call.
If there are further steps I think the most likely is more quantitative easing it'll get called QE3 by the markets.
Well let me ask you this you are really interesting op Ed for the Wall Street Journal yesterday you talked about the comparisons between with the Bank of England.
Is doing and planning to kind of help -- and help that country vs what the Fed care should be doing and you kind of made a parallel argument.
Between its -- explain to me why that was your line of thinking for the US -- Well I I had two thoughts that a bit beaten the Bank of England plan is a plan could help banks get access to funding.
At cheaper rates if -- lend it to customers to households.
And to businesses.
There are some complications there would be some complications and importing.
A plan like that into the United States the Fed doesn't quite have -- is -- much.
Legal freedom as the Bank of England does the other thing the Fed could do however it's completely -- authority.
Which I've advocated for a long time is to cut the interest rate it now pays banks on excess reserves.
In fact I'd like to see them make it negative kind of sand blast some of that money out of the banks.
You know when you talk about -- we are the cutting interest on the excess reserves and -- point -- you have.
Asked for this for for a long long time why not go that direction when.
-- -- QE3 whether or not the Fed does it likely not now but perhaps -- September which is what a lot of economists had been.
Forecasting.
So much less politically driven.
Well you know ironically.
The Fed has taken a lot of flak from from.
