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Stanley Fischer: Trump is looking for a "scapegoat" for the hazard of economic downturn

ReleaseTime£º2018-12-24    Views£º23



During Shanghai Finance Forum 2018 jointly hosted by SAIF, CAFR and GFLF on December 15th, Stanley Fischer, Former Vice Chairman of the Federal Reserve and Former Governor of the Bank of Israel, stated that US President Trump put the Fed in an awkward position, in response to the moderator's question about whether ¡°the Fed will stop another round of interest hike under the influence of Trump¡±.

If the Fed listens to Trump, it would seem that it changes the policy due to the pressure. Therefore, he thought that Trump is "very smart" to use the Fed as a "scapegoat", because if the economy declines, Trump would say, "I warned the Fed that we should maintain low interest rate." Stanley Fischer highlighted that a central bank should maintain its independence and professionalism despite any external influence.

Stanley Fischer also explained that at present, 70% of analysts believe that the Fed will raise interest rates again on December 19th, i.e., next Wednesday. However, the US stock market has recently plunged, as deep as 500 points last night. He pointed out that if the Fed does not raise interest rates this time, it would signal that the current deterioration of the US economy is faster than the Fed expected.

However, Stanley Fischer analyzed that the Fed's interest hike primarily depends on the domestic economy, while the unemployment rate has stayed low recently. Therefore, Stanley Fischer believes that the Fed will raise interest rates for the fourth time during the year on December 19th.


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