Former General Electric (GE) chief Jack Welch told CNBC on Wednesday the Fed would be crazy to hike rates in the near future.
“It would be insane…exports would fall off the table even more. The dollar would strengthen. It does nothing at all for the US economy,” Welch said, adding that “We have [also] got oil problems in the U.S.”
Welch’s comments echo last week’s plea from Caterpillar (CAT) CEO Doug Oberhelman to the Fed to put off raising interest rates given the “fragile economy” and the impact of lower oil prices on the already-tepid inflation picture. Oberhelman made his comments following his company’s earnings which came well below expectations.
Welch said the Fed should not consider easing monetary policy when many of the world’s central banks are cutting interest rates and launching aggressive stimulus packages—including the ECB, which announced last month a $1.2 trillion bond-buying program. The ECB said it would purchase sovereign debt from this March until the end of Sept. FY’16. The move has added to further weakness in the euro against the greenback, which has surged more than 15% against the single currency in six months.
“If you look at this global market, this is a bitch of a problem with this dollar currency ratio,” Welch said. “I think the Fed would be crazy to raise rates at this point with the dollar where it is.”