U.S. Outlook: Start the pre-game show
It’s almost game time. Next week’s FOMC decision on interest rates has attracted as much pre-kickoff commentary as a big game. And for good reason: If the rate hike is mistimed or poorly communicated, it could have serious ramifications for our economic and financial future.
Economists are evenly split on the likelihood of an initial rate increase next week. Consider the pre-game facts:
- Recent U.S. economic data have come in firm enough to justify a modest initial interest rate hike
- Market volatility, low global inflation and signs of economic weakness abroad are weighing against a rate hike next week
- Fed funds futures are only giving a 28% probability to a September rate hike
- A September rate hike would not be the end of the world for the U.S. economy