'The Fed Has Been Very Picky,' Chief Economist Stephen Stanley Says

NEW YORK (TheStreet) -- The Federal Reserve has held out on raising rates despite a number of people telling it to "just raise them already," BloombergTV's Julie Hyman reported on "Bloomberg Markets" Thursday afternoon.

"I've been part of that chorus for a very long time," Amherst Pierpoint Securities Chief Economist Stephen Stanley said on the show. 

The Fed has had the "luxury" of being "very picky" about when it chooses to hike interest rates because inflation has been "pretty benign" this year, he said. 

"I'm not sure how long they're going to continue to have that luxury. But they've been excessively picky. Every time something happens in the market it seems like they pull back for three or six months," Stanley explained. 

While the Fed will most likely not raise rates at its meeting next week on September 20 to 21, it will probably move them at its December meeting, he predicted. 

"So we're just going to have to cross our fingers and hope that nothing terrible happens in the market between now and then," Stanley added. 

The current situation with the Fed reveals a larger theme coming to light: that central banks are "reaching the limits" of what they can do to affect change, according to Stanley. 

"Six months ago, everyone was really excited about the negative interest rate idea, and that kind of opened up a new frontier for potentially very important monetary policy easing. And I think people are recognizing it wasn't all it was cracked up to be," he said.