Economists say Fed will hike interest rates again in March

The U.S. Federal Reserve will raise interest rates again in the next three months, according to two-thirds of economists polled by Reuters, although many say rates won’t rise as quickly next year as policymakers have suggested.


Zero spam.

The Fed hiked rates for the first time in nearly a decade on Dec 16, confident the U.S. economy can stand higher borrowing costs after years of stimulus and near-zero rates, although Janet Yellen, who chairs the rate-setting Federal Open Market Committee, made clear future increases would be gradual.

Considering the muted outlook for inflation and oil prices, a strong dollar hurting U.S. manufacturers, and the continued fragile state of the global economy, the Fed may have to be cautious with future rate hikes.

3rd Party Advertisement

Still, 77 of 120 economists in a snap poll conducted a couple of days after the meeting, said rates will next move higher by March. And all others but two said it would happen in the second quarter.

“Defining ‘gradual’ and divining how the FOMC will implement a gradual rate increase will become the new parlor game for financial markets and monetary policy wonks,” William Lee, head of North American Economics at Citi, wrote in a note.

“We are confident that the actual pace of interest rate increases likely will be slower than that implied by the FOMC ‘dots’. Not only are there downside risks to the outlook, but the FOMC’s own predilection for responding to financial market distractions likely will dampen the pace of rate increases.”

Fed policymakers – whose views are visually plotted and published by the Fed as dots – currently estimate rates at 1.25-1.50 percent by the end of 2016, 100 basis points higher than the current rate.

The median forecast among economists polled by Reuters, however, is that the fed funds target rate would be 1.00-1.25 percent by then.

Read Original Story...
Canada, Mexico and Japan want to revive the Trans-Pacific Partnership free trade deal
Defense stocks at record highs after Trump signs $110 billion arms deal with Saudi Arabia
Trump’s proposal to sell oil reserve shows decline in reliance on imports, weaning off OPEC crude
Japan, Trans-Pacific Partnership members to pursue trade deal without the U.S.
OPEC seen extending output cuts as Saudi Arabia says most members on board
Oil prices rise as OPEC, other producers are expected to extend, deepen supply cuts
About Kelvin Ching

I'm a professional Forex trader and I have been trading for over 7 years. I was a series 3 broker and a registered CTA with the NFA, the main regulatory agency in the United States, and I have been involved at the highest levels in commodity trading. I also have a background in Information Technology, graphics design, and programming... I'm the co-founder of, a site dedicated to fundamental analysis and news trading.

Speak Your Mind



Zero spam.