Morgan Stanley’s CEO Says Fed Should Hike in Summer

Morgan Stanley Chairman and CEO James Gorman told CNBC on Thursday the Federal Reserve should increase interest rates in the second half of the year.

“I would definitely raise [rates] in June,” Gorman said on “Squawk Box” from the World Economic Forum in Davos. “It’s a sign of strength. It’s a sign of confidence. It’s recognition that the U.S. is back on track.”

Not hiking rates could lead to a repetition of history, he warned: “You run the potential on the side of an asset bubble. And that’s what got us into trouble in the crisis.”

The U.S. economy is doing terrifically, he said, adding that he sees U.S. economic growth between 3 percent and 4 percent over the next several years.

“I’m very confident about the U.S. outlook,” Gorman said. “If you look at unemployment under 6 percent … the strength in the dollar … the return of the housing markets … the appreciation of 401(k) plans … cheap energy, the list goes on and on.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza