Economists to WSJ: Fed’s Low Rate Plan May Create Crisis

Many economists say that if the Federal Reserve follows through on its plan to keep interest rates near record lows through late 2014, it risks an inflationary crisis.

Of 49 economists surveyed by The Wall Street Journal, 33 of them said that would be waiting too long to raise rates. Only three said that would be too soon, 11 said that would be just the right time, and two didn't answer.

"If the Fed waited that long, it would be too late. I think the Fed will act before then," Paul Kasriel, chief economist at Northern Trust, tells The Journal.

The central bank has stressed that the late 2014 date represents just its current intention and isn’t cast in stone. Depending on what the economy does, it can tighten policy earlier or later.

"I don't know why anybody believes the Fed's forecast," Kasriel says. "They didn't see the biggest recession in the postwar era coming."

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