The US Federal Reserve will raise interest rates twice in 2016, and the first increase is likely to occur in June, but the likelihood of this is reducing amid signs of a weak start of the year, lack of inflation, and global instability, showed the Reuters poll.
It is likely that Fed won’t take any action at the April meeting, but will raise the federal funds rate by 25 basis points in June to 0.50-0.75 %.
Another increase is expected to happen before the end of the year, bringing the rate to 0.75-1.0 %. However, the confidence of economists in two rises this year, which hinted the Fed, is weakening.
A growing minority of economists, surveyed as part of the monthly research - about 25 %, forecast only one increase this year compared with 15 % in the March survey.
Two-thirds of economists - 54 of 81 - expect an increase by the end of June.
A bright spot for the regulator is the US labor market. For the past year, with the exception of three months, the economy created 200 000 more jobs, including 215 000 in March.
The number of applications for unemployment benefits fell last week, coinciding with the level of the beginning of March, which is the lowest since 1973.
There is no significant rise in the level of wages and consumer price inflation. In March, inflation fell to 0.9 % in annual terms from 1.0 % in February.
Amid concerns about the global economy, especially the situation in China, respondents on average expect a 15 % probability of recession in the US, the same as in March.
The US economy almost stopped its growth in January-March, according to the latest forecasts of the Federal Reserve Bank of Atlanta. Economists polled by Reuters were more optimistic, expecting 1.2 % growth in the first quarter on an annualized basis.
However, it is much lower than the growth forecast of 2.0 % from just a few months ago - an unusually sharp decline in such a short period of time.
Economists continue to impair their growth forecasts for 2016. Now they expect the US economy expanding by 2.0 % compared with 2.1 %, according to a poll in March.
The International Monetary Fund this week reduced again its growth forecast for the US economy and now expects it to expand by 2.4 % this year, compared with 2.6 % in the previous forecast.