Paul Krugman, challenging the consensus of economists and the Federal Reserve’s forecasts, said policy makers are unlikely to raise interest rates in 2015 as they struggle to spur inflation amid sluggish global economic growth.

“When push comes to shove they’re going to look and say: ‘It’s a pretty weak world economy out there, we don’t see any inflation, and the risk if we raise rates and it turns out we were mistaken is just so huge’,” the 2008 Nobel laureate said in Dubai. “It’s certainly a real possibility that they’ll go ahead and do it, but probably not, and for what it’s worth I and others are trying to bully them into not doing it.” 

Krugman, author of “End This Depression Now!” has criticized the U.S. government and central bank for not doing more to revive the economy after the financial crisis, and his position now pits him against most Fed officials.

Krugman said financial markets are signaling that policy makers will delay raising borrowing costs. His remarks build on arguments he’s made in his New York Times column. On Dec. 10 he wrote that the Fed risked “letting itself being bullied into doing the wrong thing” by raising interest rates prematurely.

Yields on 10-year U.S. Treasuries are at the lowest level since mid-2013, and inflation expectations have dropped with the slump in oil prices. The Federal Open Market Committee, which next meets to set rates on Dec. 16-17, will take energy costs into account in its assessment of inflation and the economy. (Bloomberg)