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Bernanke: Fed will raise rate in Dec. and 2017

Reporter: Laura Luo 丨 CCTV.com

12-02-2016 16:49 BJT

The US Fed is poised to raise interest rates this month and next year depending on economic conditions. That was the word Friday from the former chairman of the Fed -- Ben Bernanke -- at the 7th Caixin Summit in Beijing.

Bernanke is optimistic for the United States' economic recovery but was challenged by former IMF deputy managing director Zhu Ming. Zhu is CERTAIN the global economy will be subdued next year. Our Laura Luo reports on the differing global economic outlooks following Donald Trump's election as U.S. president.
Former US Federal reserve chairman Ben Bernanke is positive on the US economy, as it approaches full employment, inflation target and household consumption is upbeat.
He says a December rate hike is almost certain to happen, followed by more in 2017.

Some other economic heavyweights at the summit are more pessimistic about global growth.

"Markets have always been the winner, global assets allocation has followed low interest rates of the US Fed, and low risk premium. But the election of Donald Trump has changed the expectations of a rate hike. If this curve leaning towards the Fed's standard, it means a huge re-balance of risk premiums and reallocation of global financial assets. Massive capital flow across the globe is inevitable." said Min Zhu,former deputy managing Dir. IMF.

"The Economist said this April that the world's central banks have run out of ammunition. Why is that?" said Adair Turner,former chairman of UK Financial Policy Committee.

Turner said increasing debt problems, decreasing investment, and expanding income gaps have contributed to the current economic doldrums.

There is some good news amidst all of the economic doom and gloom however. Bernanke said China's reform measure to upgrade the country's economic structure are on the right track.

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