JP Morgan Says Fed to Hike at a Faster Pace Next Year

The Federal Reserve could increase a key short-term interest rate to as much as 2 percent by the end of next year, JPMorgan Chief U.S. Economist Michael Feroli said Thursday, a day after the central bank concluded its two-day meeting hinting of a monetary tightening later this year.

The fed funds rate will “probably be more like 1.75 percent to 2 percent” by the end of 2016, Feroli said on CNBC’s “Squawk Box.”

“If we get to 2 percent, that would be accommodative by normal measures.” To get there, he said, the Fed could hike rates “every other meeting perhaps” once the tightening cycle begins.

The Fed policy statement released Wednesday afternoon and subsequent news conference with central bank Chair Janet Yellen provided indications that near-zero percent rates are on track to move higher for the first time since 2006 sometime this year, with possibly two moves in store.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza