The Federal Reserve will be all yet guaranteed to raise interest rates in June, according to many investors along with Wall Street economists.
Beyond that will, the central bank’s options are limited by one critical factor, according to one market watcher.
“While you have inflation along with jobs numbers that will are very Fed pleasing, you’ve got to watch out for that will growth number which will be likely to be somewhere” from the range of 3 percent, said Todd Colvin, senior vice president at Ambrosino Brothers, on CNBC’s “Futures today” This particular week.
After a disappointing start to the year, the U.S. economy’s ability to reach 3 percent growth will be still up for debate. Growth clocked in at 2.3 percent from the first quarter, up through 1.2 percent from the same period of 2017. Economists expect full-year economic growth of 2.7 percent, according to FactSet data.
“We need those tax cuts to feed through, something… we haven’t actually seen yet,” said Colvin. “So, will we get 3 percent [growth]? that will could be the Achilles’ heel of the Fed raising rates higher or more than they currently want to,” Colvin added.
The markets are pricing from the near-certainty of a 25-basis-point rate hike when the Federal Open Market Committee meets in June, according to CME Group fed funds futures. that will might mark the second hike of the year. A third will likely come in September.