Time for the Fed to Increase Rates? Analysts Debate on BloombergTV

Steve Ricchiuto, MZUHO Securities chief economist, and Bob Michele asset management global CIO with JP Morgan (JPM), joined BloomberTV's 'Bloomberg GO' to discuss the economy and the Fed raising rates.
By Giovanni Bruno ,


NEW YORK (TheStreet) --The Case-Shiller 20-City Home Price Index has had its first back-to-back month-over-month drop since 2014, home prices in 20 U.S. cities are climbing, but a little less than forecast, BloombergTV's Jonathon Ferro reported on Tuesday's "Bloomberg GO."

MIZUHO Securities chief economist Steve Ricchiuto and JP Morgan (JPM) - Get Report asset management global CIO Bob Michele discussed the data, the state of the U.S. economy and debated the Fed raising rates, on the program this morning.

"The economy is just bouncing along at around 2% growth, we were weaker than that in the first half of the year, but we're going to bounce back in the second quarter," Ricchiuto explained, saying he expects an average of 2.25% for all of 2016.

"Not a great year, but not a horrible year," he said.

"We're going to come in at about 2%," Michele agreed. Moreover, "it's been since 2006 that the U.S. economy had a three handle on it." 

To that effect, the question of whether or not the Fed should raise rates in this current state of the market was tackled as well.

"There doesn't seem to be a case for them (the Fed) to sit back and do nothing. Other than the fact that they haven't prepared the meeting to raise rates this week, I think they should be doing it," Michele said.

Additionally, Michele said that when the Fed last hiked rates in December, all the things they were concerned with have shown improvement (financial conditions, the labor market, housing, and consumer spending). Leading him to believe that they should at least be having the discussion. 

"I think now that the data is getting better, inflation is getting better we've gotten back on the financial market environment, the Fed kickstarts the concept that they're going to be raising rates," Ricchiuto said, explaining he's not an advocate for it, but feels the Fed, in their minds, needs to.

Loading ...