You're watching...
Columbia School of Business Dean Glenn Hubbard on whether further action by the Federal Reserve would help boost the economy.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Now as I mentioned the minutes from the Federal Reserve's latest meeting are now in and they seem to indicate that fed officials.
Are seriously considering taking further action to stimulate the economy.
Let me bring -- -- Economic advisor to presumptive GOP presidential nominee Mitt Romney and dean of the Columbia school of business faster Hubbard thank you so much for joining us -- -- Well the big question tonight is is another round the stimulus really what our country needs right now will this all our problems.
I don't think it would be particularly hopeful what -- quantitative easing might do is lower modestly yields on ten year treasury instruments that's not really what's holding back the economy it's really the government that needs to act.
So it's so another round if she read it is not the way to go I don't think so -- And do you believe that at this point the Fed will enact another round of stimulus.
Well that's up to defend but I think -- in order to really help the economy we need to reduce policy uncertainty and can avoid going off the fiscal cliff.
Professor I think that there's still just obviously a lot of concern today about the future.
Of the Fed in what is going to happen there do you believe that the Fed actually has the tools.
That it's going to take to get us out of this you know what has been a very dismal economic recovery.
We'll look -- certainly is abundant schools that a part of our problems are structural problems and that's not really an area for monetary policy.
It's really an -- for the government in fiscal policy regulatory reform and other issues.
Not these bank did indicate today that they are going to do something to act in the markets interpreted that as that the market came well off of its lows of the day.
However the Fed officials did say in those minutes that they agree.
That data is pointing to recent deceleration of economic and activity and considerable slower spending.
Overall and how you interpret what the Fed is seeing right now it it it appears that they're saying things are actually not just stagnating but.
Slowing.
-- the Fed is worried and I think legitimately slow so the economy is.
-- a stagnating period we are not seeing very rapid growth job creation is simply not there so the -- right to worry.
The question though is whether that worry should translate into QE3 I just don't think that would be particularly helpful.
So again the Fed said that day the Fed indicated that they will act the markets interpreting that they act.
I'm just curious how how would you expect Romney to react if we do you see the -- -- reserve.
Enact another round of stimulus.
What -- what governor Romney is cities he's focused on the right kind of fiscal and budget policy and policy certainty that would actually help the economy for the long term.
That's really what the government can do most of all.
And -- obviously we've seen a you know from many Republicans on the hill they've criticize the work of the Fed since the end of the recession.
There's obviously a lot of conflicting viewpoints about what we can and can't do you you know obviously we're facing this fiscal -- What the end of the year look like.
To you right now.
What's a lot of uncertainty because frankly we don't know whether the dividend tax is going to be 15%.
Or 43 point 4%.
What's the capital gains rate what's the you -- ordinary income rates.
That kind of uncertainty chills a lot of spending decisions he's spending cuts also chill a lot of decisions.
Our leaders really need to come up with a credible fiscal plan governor Romney has certainly proposed one.
And I think you bring up a really great point I think that that's what the markets have been looking forward is leadership in all of this.
And -- next big thing that we can look forward to is the Jackson Hole meeting.
Markets are really pinning a lot of hopes on that meeting.
Do you think that that's you know do you think that that could be a -- or do you think that that's really got a good something's gonna come out of the -- -- I think it will be very interest -- meeting it's always a wonderful place to go I would be very surprised.
He is chairman Bernanke.
Has a kind of major announcement from the markets -- that at that meeting.
And in I wanted to point out one other thing that the Fed actually did say -- -- there's incoming information pointing to a substantial and sustainable strengthening in the pace of the recovery.
That they may not act if they don't practiced in -- stimulus what happens to our economy then.
Well I think given that that there's not much the Fed could do with QE3 it's more of the same really until the government acts in the Fed of course would keep the monetary accommodation that presently has in place.
The real need is for leadership from our government presently don't have it but we could.
And professor that being said -- do you think that we've got the right -- -- how do you.
Who do you think is that is the right man for the job to be the chairman.
-- -- -- -- -- Well that's really a question for President Obama or for a president Romney.
Think what we need to -- the Federal Reserve is a team is committed to low inflation the financial market stability and to the Fed's independence.
And the -- -- have a have a history of Ben Bernanke you guys have known each other since your kids that I read.
Since we are much younger yes I packed so -- you you have somewhat of a favorable impression of him.
I do yes and I would think you so much Glenn Hubbard thank you for joining us.
