Paul Krugman: 2015 Fed Rate Increase Unlikely

Paul Krugman, challenging the consensus of economists and the Federal Reserve’s forecasts, said policy makers are unlikely to raise interest rates in 2015 as they struggle to spur inflation amid sluggish global economic growth.

“When push comes to shove they’re going to look and say: ‘It’s a pretty weak world economy out there, we don’t see any inflation, and the risk if we raise rates and it turns out we were mistaken is just so huge’,” the 2008 Nobel laureate said in Dubai. “It’s certainly a real possibility that they’ll go ahead and do it, but probably not, and for what it’s worth I and others are trying to bully them into not doing it.”

Krugman, author of “End This Depression Now!”, has criticized the U.S. government and central bank for not doing more to revive the economy after the financial crisis, and his position now pits him against most Fed officials.

Bloomberg

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