Dartmouth College economist Andrew Levin, who once was called Janet Yellen’s “de facto chief of staff” by the Washington Post, thinks it would be a mistake for the central bank to hike interest rates in September.
“We’re not home yet — we’re not back to full employment,” Levin said in an interview with MarketWatch, citing research on labor-market conditions that he’s conducted with co-author Danny Blanchflower, a former Bank of England economist now also at Dartmouth.
The unemployment rate is not a good indicator because it masks workers who have just given up looking, he said. For the Fed to push ahead risks a repeat of the Bank of Japan’s premature effort to raise interest rates in 2000.
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"There is more to be lost by being wrong and moving too soon than waiting a few months to see if China is just a ripple in the global economy or the precursor of a bigger storm," Swonk said.
Likewise, Sung Won Sohn, an economics professor at California State University, Channel Islands, thinks the Fed will delay a hike.
"A quarter-point won't mean much to the U.S. economy, but it could mean significant additional turbulence in emerging markets such as Brazil, Indonesia and India, which are already seeing sizable outflows of capital," Sohn said.
