US Fed Expected to Raise Rates in 2015

The Federal Reserve is expected to start raising U.S. interest rates in the third quarter of next year as the unemployment rate falls and the economy charts a new path of stronger growth, a Reuters survey of economists showed.

The U.S. central bank slashed short-term interest rates to a record low close to zero in December 2008 and committed to keep them there while it nursed the economy back to health.

Thirty-two of 63 economists surveyed forecast the Fed hiking overnight rates in either the second or third quarters of 2015, while 14 saw a rate hike coming earlier and six saw it coming later.

Two simply said sometime in 2015. The median forecast pointed to the third quarter.

“You are looking at an unemployment rate that probably gets below 6 percent by the second half of 2015 and that’s within a hair’s breath of full employment,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “It will start to push up wage growth by that period.”

The poll forecast the jobless rate averaging 6.4 percent this year. This suggests that as early as the second quarter of this year, the unemployment rate could breach the 6.5 percent level that Fed officials have said would trigger discussions over when to raise interest rates from near zero.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.