We sat down with Nobel prize-winning economist Robert Shiller at the World Economic Forum in Davos, Switzerland. We asked him what a rate hike would do asset prices. He also gave us his thoughts on the more important question of who President Trump will choose as Fed chair. Following is a transcript of the video.
Well, the question is whether the increase is greater than expected or not, and I’m talking like an efficient market economist but already, people are expecting the Fed to raise interest rates and it’s already had an impact on longer-term interest rates and it already had an impact on the price of the dollar. So the question is, will they raise them more or less than expected? Another question is, who Janet Yellen’s replacement will be and what does that person’s stance look like?
(Do you have a thought on who it might be or who it should be?)
I think they should keep Janet Yellen on, she’s great. But of course, Trump won’t.
(Do you have an idea on who you think it will be?)
It would be some great business person. Probably a man. And probably someone who is not really focused and impressed by the Fed, who wants to probably share his values about deregulation and keeping out of – let the businessmen do their business.
(And would that be the worst-case scenario, what type of person would be the worst person you can put in charge of the Fed? No, you don’t have to say a person but what type of person?)
Ron Paul, who wrote the book “End The Fed”.
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