Federal Reserve can Increase Interest Rates in Second Half of the Year: Survey
Federal Reserve can Increase Interest Rates in Second Half of the Year: Survey

The National Association of Business Economists conducted a survey in which 293 economists took part. As per them, the Federal Reserve can increase interest rates in the second half of the year.

However, it has been noticed that uncertainty over the plans is no affecting the US economic growth. As many as 71% of the total economists who took part in the survey said that they do think that the Federal Open Market Committee will increase the federal funds target rate this year.

Since the end of 2008, the rate has been almost zero. Experts do not think that even if the Fed takes time to increase the rate, it will have much impact on the pace at which economic recovery is taking place.

One thing is quite different this time and that is time people are more hopeful about the economic growth, which was not the case in August. At that time, 53% affirmed uncertainty was affecting the recovery.

The survey, which was carried out from February 5 to 19, also found a drop in share of respondents who think that US monetary policy is too stimulative. John Silvia, the chief economist at Wells Fargo and president of the association, was of the view, “Almost half the respondents believe current fiscal policy to be about right”.

When it came to taking action to increase the target, 31% of the respondents think that the Fed should increase the target for the federal funds rate in the first half of the year. But 34% think that the action should be taken in the second half.

Twenty-four percent think that the Fed should not increase the rate before 2016 and 4% think that rate increase should take place in 2016. Seventy three percent of the respondents think that the Fed should retain 2% inflation target.




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