OECD Secretary General Has Asked Fed to Raise Rates Since 2014by and
OECD Secretary General Angel Gurria said that central banks are “running out of ammo” and that signs of global economic recovery are discouraging.
“I have been asking the Fed to raise rates for a long time, since last year,” Gurria said in a Bloomberg television interview in Paris on Friday. “We are long overdue for normalization.”
He said the recovery will be moved along by innovation, research and development and flexibility in the labor and product markets.
The Federal Reserve suggested in November that it’s considering raising rates this month, depending on economic data. ECB President Mario Draghi cut the deposit rate by 10 basis points yesterday, prolonging the Eurozone’s low interest rate environment.
The Organization for Economic Cooperation and Development consists of 34 developed countries that account for more than 60 percent of the world’s GDP and three-quarters of global trade.
Gurria said there’s still concerns about the world economy. Global trade is increasing at 2 percent, while global economic growth is at 2.2 percent. Only five times in the past has trade been lower, which have all resulted in recession, he said. Slumps in emerging economies such as Russia and Brazil are contributing to the uneven growth, while the U.S. is the bright spot, he said.
“The writing is not on the wall,” Gurria said, referring to the global recovery. “We will have to try everything.”