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Moskow Gives A Thumbs Up To The Fed

Former Chicago Fed President Michael Moskow has given a thumbs up to the Fed's response to the financial crisis.

On Closing Bell with Maria Bartiromo, Moskow said the Fed helped get the economy through the fallout and that "they will handle the exit strategy appropriately".

When asked about the economy, Moskow said to expect a “U-shaped” recovery. He mentioned inflation will be a long-term problem the U.S. will have to watch.

Moskow's biggest concern going forward?

The budget deficit.

Moskow told Maria he's “concerned about the level of government spending”. In fact, he says the CBO's budget forecast is not sustainable. When you take Medicare, Medicaid and social security… Moskow says 9% of the GDP is spent on these programs alone. By 2035, he says it will be 35%.

Maria asked Moskow about the effectiveness of Obama's stimulus plan. Moskow told her 'it's too early to tell exactly how effective the stimulus has been.'

As for Fed predictions, it's the million dollar question everyone wants to know --- “When will the Fed raise rates?” According to Moskow, forget about this year…he believes hikes may come well into 2010.

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Questions? Comments? Write toinvestoragenda@cnbc.com

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