US Fed unlikely to raise rates in 2015, says Nobel winner

by Gulbin Yıldırım

WASHINGTON

Joseph Stiglitz, the Nobel Prize-winning economist, said the Federal Reserve was unlikely to raise interest rates in 2015 in order to support the U.S. economy.

Fed officials have long said the timing of the first rate increase would be dependent on incoming economic data. But the recent trove of data on consumer spending, inflation and jobs has virtually eliminated the chances of the Fed's move in the year.

On the question regarding whether the Fed will make a move this year, Stiglitz told Anadolu Agency: "I hope not and I do not think it seems likely."

"Because the U.S. economy is slowing down. Because the natural resource prices are declining and that will be a contraction in the economy. Because the recovery is anemic," he said Friday.

He added that Fed officials had made the right decision in not raising rates last month.

"They will keep looking at the upcoming data, said the 2001 winner of the Nobel in economic sciences who has written extensively about inequality. "But I do not think they'll have enough data by the October meeting. Right now it does not look like they can start in December either."

- "Global economy is not flirting with a new recession"

Stiglitz noted the global economy was not flirting with a new recession.

"In terms of the global economy what matters is the slowdown in the purchase of natural resources and China plays a big role in that. The effect, especially on South American countries and also on other commodity exporters, is significant. But we wanted that. Because we wanted them to change the structure of their economy. However, I do not think the global economy is in a recession or nearing one. It is growing but below its normal growth trend."

He added that emerging market economies, such as Turkey, had to adapt the new realities of global economy.

"Each of them is going to have to do it according to their own circumstances. There is no 'all sizes fit one' type of solution," he warned.