Fed May Double Rate Target This Year, Bond Firms Say
http://quote.bloomberg.com/apps/news?pid=10000103&sid=aeoO9p9B682s&refer=news_indexFed May Double Rate Target This Year, Bond Firms Say (Update2)
June 10 (Bloomberg) -- The Federal Reserve will at least double its 1 percent interest-rate target for overnight loans between banks by year-end, a majority of economists at Wall Street's largest bond-trading firms said.
The addition of 1.2 million jobs this year, at a monthly average of 316,000 since March, has some economists doubting the central bank can keep its May 4 pledge to raise interest rates at a ``measured'' pace without risking faster inflation.
``You're going to see `measured' disappear from their rhetoric within the next few months,'' said Larry Kantor, 51, head of economics and market strategy in New York at Barclays Capital Inc. and a former Fed economist. ``The Fed actually needs to slow things down.''
Economists at 10 of the 23 primary U.S. government securities dealers that trade with the Fed's New York branch said the so-called federal funds rate will be 2 percent by year-end, according to a Bloomberg News survey. Barclays and J.P. Morgan Chase & Co. are among four firms saying it will be 2.25 percent. Barclays forecasts a quarter-percentage point increase this month and half-point boosts in August and November. <snip>