Huitong.com July 24th - Reuters survey released by on Thursday (July 24th) showed that the U.S. economy is expected to accelerate after its sluggish performance in the first half of the year, causing the U.S. Federal Reserve (Fed/FED) ) can raise interest rates in September.
The US economy started weak this year, with GDP shrinking month-on-month annualized rate in the first quarter, but a moderate rebound in the second quarter strengthening the Fed's view that interest rates will be raised. Scott Anderson, chief analyst at Bank of the West, said the Fed would not wait long for the first rate hike and said a September hike was appropriate.
But given the moderate inflationary pressure, the Fed's pace of tightening monetary policy may be gradual. The median estimate of the Reuters survey showed that the median federal funds rate was 0.375% at the end of September, 0.625% at the end of the year, and 1.125% after 12 months, the same as the June survey results.
About two-thirds of analysts believe that the biggest challenge facing the Fed's expected rate hike path is an unexpected slowdown in the U.S. economy. Eight analysts said the biggest challenge was that wage growth did not rise significantly. Two other analysts believe there is no challenge at the moment.
The Federal Reserve will hold a policy meeting next week. Most people say the U.S. economy is not ready for interest rate hikes, including disappointing retail sales, turbulent international markets and appreciation of the dollar.
Hugh Johnson, an analyst at Johnson Advisors, said inflation remains very soft and the improvement in employment situations is not as large as the unemployment and non-farm employment data suggest.
Reuters' interview with 81 analysts showed that the average U.S. economic growth rate this year is expected to be 2.3%, the same as the June survey results. According to the latest Reuters survey, the average unemployment rate in 2015 is expected to be 5.3% now, and it is expected to drop to 4.9% in 2016 and to 4.8% in 2017.
The U.S. Consumer Price Index (CPI) excluding food and energy is expected to rise on average this year, compared with 1.7% in 2016. Estimates of other economic indicators have little change compared with the previous survey. The copyright of the content of
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