This week we chat with Mickey D. Levy, chief economist of the Americas and Asia, Berenberg Capital Markets. Mickey is a long-standing member of the Shadow Open Market Committee and conducts research on a wide range of global economic, financial and policy issues.   

The Lead Left: Mickey, we seem to be at an inflection point in the economy. If you were the Fed, would you raise rates?

Mickey Levy: The economy has been growing at a comfortable rate—not rapid, but OK—and the probability of recession is very low.  Inflation is modestly below the Fed’s longer run 2% target.  Keeping the Federal funds rate anchored to zero is absolutely inconsistent with these conditions, and the Fed should definitely hike rates.  Keeping rates artificially low has costs:  economic and financial distortions and risks are mounting.  And most people and even the Fed are seemingly unaware of history:  in all prior Fed rate increase cycles, economic performance is unharmed, with sustained growth, and the stock market maintains recent gains or goes up further.