Economists Divided Over One or Two Hikes from the Fed in 2015

A number of officials from the central bank have already suggested that two rate rises are possible this year, but economists and investors assessing the economic data are now also leaning in favor of two hikes.

“Yellen has always said that when wages go up between 4 and 5 percent that’s when we raise rates,” Paul Donovan, global economist at UBS investment bank told CNBC, referencing employer costs for employee compensation data from the U.S. labor department, which is now growing at 4.2 percent year on year for wages and salaries.

“This is going to be a very gentle, gradual trajectory, but I think they hike in September and I think they hike in December, I expect two hikes this year. Remember inflation really is picking up in the U.S. in a reasonably notable way, it is going to be coming in comfortably over 2 percent at the start of next year,” he said.

via CNBC

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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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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