Economists are dialing back their
expectations for the timing of the first Federal Reserve interest rate
increase this year, in part because of a decline in inflation, according
to the latest Wall Street Journal survey.
Most Fed officials have indicated they
expect to start raising their benchmark short-term interest rate from
near zero this year, and several have pointed to midyear as a likely
time for liftoff if the economy evolves as they expect.
Several of the 69 economists surveyed said
the Fed may move later because of low inflation, which has fallen short
of the central bank’s 2% target for 32 months. “We think the Fed has the
leeway to wait until September, on the premise that seeing a bottom in
core inflation is important,” said Thomas Costerg, economist at Standard
Chartered, referring to a measure of consumer prices that excludes food
and energy prices.
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