NABE Expects Rising Near-Term Rates In 2016

March 15, 2016
A growing number see tight fiscal policy as restraining economic growth.

According to the NABE March 2016 Economic Policy Survey, economists expect the Federal Open Market Committee to continue raising the near-term target for the federal funds rate throughout 2016. However, says NABE President Lisa Emsbo-Mattingly, director of Global Asset Allocation, Fidelity Investments, respondents generally expect fewer increases this year than had been predicted in an August 2015 survey. The NABE March 2016 Economic Policy Survey summarizes the responses of 252 members of the National Association for Business Economics.

“While slightly more than half of survey respondents believe that the current monetary policy stance of the Fed is ‘about right,’ nearly 31% indicate that current policy is too stimulative,” Emsbo-Mattingly says. “Approximately 75% of respondents expect the Fed funds rate target to be raised two times or less throughout the course of 2016, with two-thirds of respondents seeing the rate peaking at 3% or lower before the Fed begins easing again.” Tight fiscal policy is increasingly cited as a significant restriction on economic growth, according to Emsbo-Mattingly.

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