A strengthening U.S. economy may prompt the Federal Reserve to raise interest rates as soon as September, said Byron Wien, vice chairman of the advisory services unit at Blackstone Group LP.
“I think the economy is going to do much better in the second half, and I think the Fed is dying to go,” Wien said on the television program “Wall Street Week” Sunday.
Fed Chair Janet Yellen, in a speech delivered Friday in Cleveland, maintained her call for an interest-rate increase this year as the U.S. economy improves.
The probability of a Fed rate increase at its December meeting moved up to 67 percent from 54 percent on July 8, according to futures data compiled by Bloomberg. For September, the odds increased to 33 percent from 21 percent.
“Fundamentals are going to improve through the remainder of the year,” Wien said. “Earnings are going to be better than expected.”
Oil prices are likely to increase moderately, he said. In January, Wien said he thought the Fed would act before the mid-point in the year. On Sunday, he acknowledged that “obviously, I was wrong about that.”
When asked about his expectations for the presidential election in 2016, Wien said the economy will probably cast the deciding vote in a face-off between Hillary Clinton and Jeb Bush.
“I think the economy will still be doing pretty well in 2016, and that will favor Hillary,” he said. “And if the economy is not doing well, that will favor Jeb.”
Biotech Stocks
The 82-year-old former Morgan Stanley senior strategist also has a strong outlook for growth in biotechnology stocks.
“I don’t know if they will cure cancer, but they will certainly help in the treatment of cancer,” he said of biotech companies. “People are going to live a long time.”
Wien rose to prominence as an investment strategist after attending Harvard College and Harvard Business School. He offers annual predictions to the investing public of surprises that may come in the year ahead.
Wien said Sunday that he began his career as a “terrible stock picker,” but his results improved after he began to employ more technical analysis in his work.
“If I was doing the fundamental work plus technical analysis I began to pick stocks very effectively,” he said.
“Wall Street Week” is produced by SkyBridge Media, an affiliate of
SkyBridge Capital, the fund-of-funds business founded by Anthony
Scaramucci. SkyBridge, which sometimes has other business relationships
with the show’s participants, advertisers and sponsors, pays Fox
stations in key markets to broadcast the show and also streams it online
every Sunday at 11 a.m. in New York. https://www.mql5.com/en/signals/111434
