Mohamed El-Erian, the chief economic adviser at Allianz SE (ALVG.DE), said on Monday he expects this week’s Federal Reserve policy-setting meeting to set the stage for a June interest rate hike.
El-Erian told Reuters: “Fed officials may even be tempted to hike as early this week though this remains a lower probability event.” The Federal Open Market Committee is due to meet Tuesday and Wednesday and then next on June 14-15.
“Notwithstanding the headwinds from abroad, the Fed is likely to hike this year at least once, and possibly twice,” El-Erian said.
Earlier this month, Fed Chair Janet Yellen said the U.S. economy was on a solid course with some hints of inflation, so the Federal Reserve was on track for further interest rate hikes.
“The U.S. economy has continued to progress in a satisfactory way. We continue to see good job performance, some evidence of inflation moving up, so that was our expectation when we raised rates in December,” Yellen said.
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