Former Federal Reserve Vice Chairman Blinder: Inflation is now too frenzied!

FX168 Financial News (Hong Kong) News The annual global symposium of Jackson Hole Global Bank is in full swing. The background of this meeting is due to the moderate improvement of global economic growth and the decline in unemployment rate, but the inflation rate has not risen as expected. . A former Federal Reserve (FED) vice-president said on Thursday (August 24) that interest rates should only be raised when inflation rises.

The focus of this year's meeting included Fed Chair Janet Yellen's speech at 22:00 Beijing time on Friday (August 25), and then European Central Bank President Mario Draghi will be in Beijing time. Speaking at 03:00 on Saturday (August 26).

The recent weak inflation data has caused Fed policymakers to fall into disagreement. According to the minutes of the July meeting, some policy makers believe that these plans should be suspended, at least to suspend the expected rate hike until it is clear that the economic recovery is lasting and the price increase will rise. 2% target to the Fed. The current inflation rate is about 0.5 percentage points lower than the target.

Former Federal Reserve Vice Chairman Alan Blinder said in an interview in Jackson Hole on Thursday that "only when inflation is improving, the Fed should raise interest rates. If inflation has been falling, then raising interest rates is crazy."

(Blinde Image Source: FX168 Financial Network)

Robert Kaplan, the current chairman of the Dallas Fed, also held similar ideas this week. He said officials should be more patient and wait for signs of renewed inflation before raising interest rates again this year. However, Kansas Fed President Esther George believes that if the US economic data can remain strong, there may be a chance to raise interest rates again in 2017.

It is worth noting that this may be the last time Yellen attended the Jackson Hole Conference as the chairman of the Federal Reserve. Her term of office will end in February 2018.

Although US President Trump said that he would consider Yellen's re-election. But several other candidates are also considering, including the White House National Economic Council director Gary Cohn, who is a core member of Trump's tax reform, infrastructure and other priority programs.

Blinder thinks. "President Trump is likely to no longer appoint Yellen as the chairman of the Fed. If Trump re-appoints Yellen, it will be a 'surprise', but I believe he will want his own people."

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