US economy to expand at around 2.5% this year, suggesting little need for policy easing - ING
|Previewing Wednesday's FOMC meeting, ING's Chief International Economist James Knightley said that although the Fed is expected to keep its policy unchanged, the tone of the accompanying statement and press conference may see the central bank try to push back against the market positioning that a rate cut is in the offing later this year.
Key quotes
"With workers secure in the jobs and experiencing higher pay this should continue to support consumer sentiment and underpin household spending. This week’s ISM reports are also expected to point to healthy corporate activity with a positive outlook for investment spending. If a deal can be done on China regarding trade then this can add more positive news to the mix. As such we look for the US economy to expand at around 2.5% this year, suggesting little need for policy easing."
"Moreover, with wage growth picking up and firms increasingly using benefit packages to retain and incentivise staff we suspect that the market is underplaying the inflationary pressures coming from the labour market. With gasoline prices set to push up logistic and distribution cost along with transport fares, we continue to look for inflation to rise more broadly in the US economy. This combination of decent growth and a consistent grind higher in inflation means we are firmly in the camp that expects monetary policy to be left unchanged throughout 2019."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.