Six weeks of international turmoil from Greece to China have had zero impact on economists’ outlook for the first Federal Reserve rate rise. Odds for a September liftoff remain at 50 percent, exactly where they were in June, according to the median of 46 responses in a July 20-22 survey. They assigned 40 percent odds to a later move and saw no chance of a decision when the Federal Open Market Committee gathers July 28-29 in Washington.
The outlook for a September move remained intact even as crises in Greece and China temporarily rocked markets and dimmed global economic prospects. Now that those concerns have eased, U.S. policy makers can focus on their dual mandate for full employment and low, stable inflation at home.
“It’s a pretty close call,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida, who puts the odd of a September liftoff at 50 percent. While policy makers are heartened by improvement in the U.S. job market, they are still concerned that inflation remains too low, he said.