Hurricanes Harvey and Irma are reasons to hold

Finance


Economic disruptions caused by a back-to-back pummeling from hurricanes in the United States may just seal the deal for the Federal Reserve to hold interest rates intact for the rest of this year, experts told CNBC on Monday.

Hurricane Irma is still making its way up Florida’s coast, but Goldman Sachs and Bank of America-Merrill Lynch have slashed their growth projections for the third quarter by 1 percentage point and 0.4 percentage point, respectively, due to Hurricane Harvey, which hit Texas and Louisiana.

“I think it may be an excuse for the Fed to hold back again from raising interest rates. I think that will be a logical conclusion,” Hugh Young, Aberdeen Standard Investments’ Asia head, told CNBC’s “Squawk Box,” on Monday.

Fed officials, in their most recent projections, had indicated one more rate hike this year on top of the two they already approved in March and June. But weak inflation data have led to dovish statements from Fed speakers, leading market participants to believe the next hike won’t happen until well into 2018.

New York Fed President William Dudley, in an interview with CNBC on Friday when Irma was poised to begin battering Florida, acknowledged that the two hurricanes could impact the timing of rate hikes. But he said rebuilding efforts following the storms will boost economic activity in the long run.



Source link

Products You May Like

Articles You May Like

Beyond Meat (BYND) Q4 2020 earnings miss
HP (HPQ) earnings Q1 2021
The wealthy are borrowing billions against their art collections
Nvidia (NVDA) earnings Q4 2021
Domino’s Pizza (DPZ) Q4 2020 earnings miss projections

Leave a Reply

Your email address will not be published. Required fields are marked *