Welch & Buffett Say Fed Should Halt Rate Hike Plan

Two of the most well-known and well-respected American business titans said on Wednesday that it was doubtful that the Federal Reserve would be able to raise interest rates in the current economic environment, especially with the dollar being stronger.

Jack Welsh mentions that it would be “crazy” for the Fed to raise interest rates in this economic environment.

“I think it would be ludicrous to raise them right now with the situation we have. We’ve got oil problems… And we’ve got a strong dollar, which is killing exports,” said the former head of General Electric in a CNBC appearance on Wednesday. Having higher interest rates would only make the dollar stronger and exports “would fall off the table even more,” Welch said, who headed General Electric from 1981 to 2001.

“It does nothing at all for the US economy to whack it now with everybody around the world easing, easing, easing” said Welch.

In a Fox Business Network interview, Buffett mentioned that he didn’t feel a hike in interest rates would be “feasible.”

“I think it is going to be very tough to raise rates when you’ve got what is going on around the world,” said Buffett.

An interest rate hike would “exacerbate” the issue with a stronger dollar and flows into the United States, added Buffett.

“It would have a lot of international repercussions,” said Buffett.

Officials at the Fed have downplayed the risks to the economy from a sharp drop in the price of oil and the stronger dollar.

Buffett’s and Welch’s comments tell us that those managing the largest businesses in America are much more worried.

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