Reuters (11/13/14) Ann Saphir
The U.S. Federal Reserve is expected to start raising interest rates by mid-2015, according to a Reuters poll of 43 economists, but at a pace that’s short of what Fed officials themselves believe would be appropriate. The economists also forecast the job market will strengthen and inflation will trend higher.
“If we still get softer, weaker inflation numbers, the markets are certainly going to wonder—is the Fed in position to raise rates in mid-2015 like they’ve been saying,” says Sam Bullard, senior economist at Wells Fargo, who forecasts a June 2015 rate increase. If there is no pickup in inflation, and particularly in wages, “that’s certainly going to be ammunition for [Fed Chairman Janet] Yellen and the doves there for rates to continue where they are for a little bit longer.”