![]() ![]() While Mr Powell has said he sees a narrow path for a soft landing, the Fed staff have predicted a US recession, according to the minutes of recent FOMC meetings.Īmong the economists surveyed, most of those not expecting a formal downturn are looking for continued expansion and do not see growth dropping to zero or turning negative.įed officials have insisted that they are keeping options open for more than one hike even amid the recent good inflation news, and Mr Powell has said there is a strong consensus for hiking. The economists have become gradually more optimistic about the outlook for the US economy, with 58 per cent forecasting a recession in the next 12 months, down from 63 per cent in the June survey and 67 per cent in April.Ĭontinued solid jobs gains, with the unemployment rate near a historic low at 3.6 per cent, combined with a greater-than-expected drop in consumer prices have shifted some economists to a more favourable view. “Inflation is still set to slow sharply, but interest-rate cuts, which we have long been expecting, are unlikely to happen before the end of this year,” said ING Financial Markets chief international economist James Knightley. ![]() ![]() Markets are pricing in the near certainty of a July hike, with the first quarter-point cut coming by March and rates plunging to 3.9 per cent by the end of 2024. By contrast, Fed officials in June forecast rates falling more gradually to a range of 4.5 per cent to 4.75 per cent by the end of 2024. ![]()
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