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.”
