Most economists are of opinion that the Federal Reserve will hike interest rates in the first six months of 2015, as recent data shows that the U.S. economy is starting to pick up after being battered by the harsh winter weather, according to a survey released on Friday.
Eight out of 18 U.S. primary traders revealed that they estimate that the Fed will raise its benchmark rate before the end of June 2015, according to a Reuters poll that was carried out on the top 22 Wall Street firms that directly deal with the U.S. central bank.
This is in contrast to a previous survey by Reuters three weeks ago that indicated that only four primary dealers expect that the interest rates will be increased by the end of June next year, comments by Federal Reserve Chair Janet Yellen that the interest rates will be increased sooner than expected.
In a separate report, the U.S. Labor Department said that the economy absorbed 192,000 new workers in March, which was less than the estimate of 200,000 in a Reuters poll of economists. The monthly unemployment rate stood at 6.7 percent against a forecast of 6.6 percent.
“The Fed will be very happy with this type of jobs report,” said Jacob Oubina, a New York senior economist at RBC Capital Markets.
In March, the Federal Reserve announced that it will rely on inflation figures, labor market indicators and “readings on financial developments” to decide when it will raise the interest rates, as opposed to the household unemployment rate of 6.5 percent. Currently, the unemployment rate is hovering around 6.7 percent and is expected to go under 6.5 percent soon.
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