Fed should delay rate hike – World Bank chief economist

By FXStreet FXStreet (Bali) – The Financial Times is running a story on World Bank chief economist Kaushik Basu warning that the Federal Reserve should postpone a much-anticipated rate hike to prevent “panic and turmoil” in emerging markets, Mr Basu told the FT.

As quoted in the FT: “I don’t think the Fed lift-off itself is going to create a major crisis but it will cause some immediate turbulence,” Mr Basu said. “It is the compounding effect of the last two weeks of bad news with that [China devaluation] . . . In the middle of this it is going to cause some panic and turmoil.”

“There is a concern in emerging economies all around in case China takes a hit. This is the problem right now in the world. Overall we are going to get into a slower global growth phase” Mr. Basu said.

“All this put together and what has happened over the past two weeks with the Chinese markets leads one to believe the scenario is looking worse than it did even in June” the Economist added.
For more information, read our latest forex news. …read more

Source:: FX Street