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UBS Chief Economist for the Americas Maury Harris on whether the Fed should take further action to boost the economy.
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Are right -- back to the economy even though the economy added more heat up more jobs than expected in July the jobless rate -- tighter so will this push the Fed to act.
Joining us now Maury Harris UBS chief economist for the America as this is the question at the end of the day Maury ever want to know are we getting more money or not.
Well you know I think what's going to be much more important for the Fed in the July numbers.
Of all the statistics because the Fed doesn't meet until mid September and they won't hardly -- in the August data.
Viewpoint is that there's not at this point usually no better than 5050 -- to the Fed is gonna give us more money -- -- -- -- -- -- -- -- You know the problem is and we talked about this here's a lot diminishing returns with -- quantitative easing.
It's not do in what it used to do into the market we get a little -- for a couple days and then something happens Europe explodes.
And it washes away all hope that it can turn this marketer or this economy around.
Well it's getting harder and harder to push down -- whom weren't because being so low vis a vis inflation.
And what we're bond buyer's doing anything different views and their printing money -- -- -- -- hands.
They saw -- bond today about something else like commodities.
Right and and sell it to your interest rate point.
Many will argue we actually need to start to see interest rates tick up a little bit maybe we need a little completion.
For people to start to get back into this market again because now we just presume it's going to be like this ally Japan for -- wild.
Well.
I think one time they get to overlook.
Is that after the Fed does something that we need to be patient we've always known -- -- long and variable -- the monetary policy.
But.
Since they already have kept the long term rates low for -- -- what's happening is that when investors perceived to have balanced mature.
And interest your interest income -- to -- Then with the -- way they respond to these lower long -- growth -- this is what you are seeing happening in real estate right now.
We're individuals wait until their bonds -- The interest income on a portfolio goes down -- the jumping into the real estate to become landlords.
Now that's an example of what the Fed does to -- -- isn't gonna be fully reflected in behavior for a number quarter.
-- I think they would be best advised to be patient right.
Now patients is really hard a couple of months of porn collection right and we need to see some movement or at least the president and his administration does.
Eight point 3% unemployment doesn't necessarily guarantee you re election.
Well.
The problem with movement it's that.
If Bernanke were to do acutely in September and if it -- should be involve treasury securities.
You gonna get criticized by the Republicans for.
Helping to print money to finance Obama's deficit projection with the Republicans -- two years ago and there's certainly some partial proof of that.
So and in -- way he's politically.
Sort of boxed -- Yeah we think maybe the best thing they could do it's -- earlier conduct this experiment that the Bank of England is doing.
We're you that you -- you work with thanks to the discount window they try to give them special financing considerations to encourage them right the -- all the excess reserves majority pumped into the system.
-- -- as they should be open to new ideas and personally keep track the same thing over and over again said thank you for sharing your thoughts have a great weekend I --
