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COPYRIGHT 2006 Voxant, Inc.
Original Source: CNBC/DOW JONES BUSINESS VIDEO ANALYST INTERVIEW
MICHELLE CARUSO-CABRERA, CNBC ANCHOR: Ah, the Fed, widely expected to raise rates by 25 basis points later today. We are joined now by Paul Mortimer-Lee. He is global head of market economics and BNP Paribas -- at BNP Paribas; and David Bloom, currency strategist with HSBC. And we have brought these two men together because they have divergent views, not necessarily on what the Fed will do, they both think 25, but what the Fed should do.
Paul you think they ought to go 50. David, you think they shouldn`t do anything. Paul, you start, make the case for 50. And, David, if he goes on too long, you just interrupt him, OK?
PAUL MORTIMER-LEE, GLOBAL HEAD OF MARKET ECONOMICS, BNP PARIBAS: Yes. Yes. It is not really my view that they should go 50, I think they should go 25. But I think there are some on the committee who will make the case for 50. After all, they discussed that option last month and they are probably likely to discuss it again. And I think the argument runs something like this, that monetary policy has been very accommodative for a long time, the economy`s at potential, and the inflationary shock which they hoped would not feed through to core inflation is feeding through to core inflation. And the economy responds rather slowly to monetary policy, and in particular, inflation and inflation expectations, probably...
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