US: Slower Start, Less Rate Hikes - Wells Fargo

US: Slower Start, Less Rate Hikes - Wells Fargo

11 May 2016, 18:01
Roberto Jacobs
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US: Slower Start, Less Rate Hikes - Wells Fargo

The new outlook for the US economy, pushed analysts from Wells Fargo to scale back on their expectations about the timing of the Federal Reserve rate hikes.

Key Quotes:

“With first quarter growth now in the books, expectations for growth for 2016 as a whole have been ratcheted down another notch. While the 0.5 percent annual rate reported for the advance first quarter real GDP print was close to our forecast, the softer April jobs report and continued declines in Chinese exports have added to fears that slower global growth will continue to weigh on the U.S. economy.”

“We continue to see this slower start to the year as a first half risk and look for solid
gains in consumer spending and homebuilding in the coming quarters to keep real GDP growth solidly in positive territory.”

“Slower global growth is most apparent in capital spending and net exports.”

“We are looking for real GDP to grow at a 1.4 percent annual rate in the current quarter and 1.6 percent for the year as a whole. The slower start to 2016 has pushed out our expectations for the timing of the Fed’s next move to September and we have also slightly scaled back our expectations for the pace of rate hikes in 2017.


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