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00:00Let me ask you how you gauge the Fed's readiness to raise rates . What are you looking at as positive signs indications that they might be willing to do it. So I'll take a little bit of a longer term view. You know a century. And the economy is just evolved so much from the time the Fed was created. A lot of that's good news. But the good news are things we can't measure very well as economists they don't show up in GDP. Quality of life on the bad news. We've seen the last four recoveries from recessions get slower and slower and slower. My bottom line is I don't think the Fed can do anything. They're powerless when it comes to the long term growth rate. They can moderate the short term things are stable. Actually we're right now that the Fed's too stimulative. JULIE There was talking about Janet Yellen speech but we'll get this GDP figure revision tomorrow . Oh yeah. Talk a bit more about that why the Fed is so perilous when it comes to growth. Well for one the Fed's lowered rates almost as low as they can go. They've started to bring them back up and look we have a two point one percent average growth rate during this recovery back in the 80s recovery it was 4.5 and I just don't think you can push the pedal down much further to goose the economy. So they've done everything they can. I don't think there's much more they can do. We need to turn our attention away from the Fed as policymakers more to things like regulatory policy tax policy that are slowing down entrepreneurs . Let's let's look at a bright spot in the U.S. economy right now. That should be housing more good data today about pending home sales new home sales. Yeah pretty good numbers as well . What it said is that buffeting the U.S. economy right now . Would you say good news in the house. I'm having a flashback to 10 years ago. And look how great housing is right. We've got such stimulative interest rates. The big question mark has to be is this a bubble. So it looks like good news now. It looks like bad news on the other side of that bubble and I don't know . I'm not saying it is but I know there's a ton of debt and the debt is growing and it's probably time to try to slow that down from the Fed's moneymaking perspective. You're out in California but imagine you get to Washington from time to time where the appetite for that seems so low the appetite to do much at all really seems very very little. When do you think politicians are going to get to take fiscal policy more seriously. Oh boy. Yeah they're great at giving us false choices where there's false choices and immigration or trade and regulatory policy. I think it's just such a boring issue that they don't pay enough attention. But if you're an entrepreneur out there you know the burden of paperwork just gets heavier and heavier and heavier. Unfortunately it's a crisis that gets policymakers focused on what have we been doing wrong. Why are we hurting the economy so badly. So I hope they'll act before that. But but I'm not going to bet on .

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Is the Fed Really Ready to Raise Interest Rates?

Tim Kane, Hoover Institution research fellow, discusses Fed monetary policy with Bloomberg's David Gura on "Bloomberg Markets." (Source: Bloomberg)

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