When will the Federal Reserve begin to raise rates? That has been the key question since the economic collapse. Fed Chair Janet Yellen has been dangling a potential rate hike like a carrot for months, but it hasn’t come to fruition yet over fears it would hurt the already vulnerable labor market.
New York University economist Nouriel Roubini concurs with other financial minds that the Federal Reserve will start to raise interest rates beginning in the middle of 2015. At the same time, the United States economy, says Roubini, will grow roughly three percent, while the rest of the global economy will diminish.
According to Roubini, the U.S. central bank wants to ensure the American economy is stable enough for such a rate hike, the first in many years if it does actually take place. Of course, it should be noted that we have consistently been told over the last several years that an increase in rates is near, but it hasn’t happened.
“That implies the Fed will start raising slightly later and slower than otherwise expected. It could be sometime in the middle of next year. It could be June, it could be July. It depends what happens to the dollar and the rest of the world,” Roubini said in an interview with CNBC.
“Even if growth, inflation and employment data are at the right level to start hiking, the Fed would like to wait a little bit longer just to make sure that if they start hiking, they’re not going to have to abort and go back to zero, because otherwise they lose their credibility. There’ll be a hard landing of the economy. So better be safe rather than sorry.”
My opinion is that there will be no rate hikes of inteerst during at5 least the first half of 2015 if not the entire year