DB Economist Says Fed Close to a Historic Mistake by Not Hiking

David Folkerts-Landau, global head of research at Deutsche Bank, says that staying at the zero bound of monetary policy for any longer would be a historic mistake.
On Bloomberg Surveillance this morning he warned:

To stay here [at zero], I believe, would be a mistake of historical proportions. They should have done it [raised interest rates] already. You may think that is an arrogant statement, but remember central banks make mistakes. If I had told you in 2003 that Greenspan was wrong, you would have said that was an arrogant statement, but he was wrong. If you go back to 1925 just when we’re back on the gold standard, a huge mistake. So we shouldn’t be afraid to say central banks make mistakes and I think this has been a fundamental mistake. They should have gone significantly before to remove that uncertainty, to allow Capex to develop, and to just take that big uncertainty out of the system.

via Bloomberg

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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