Jun 12 2015

Rate Range Projection by Bank 

Next week 122.50 – 124.50 

Next 3 months 120.00 - 127.00

 

U.S. consumer confidence surged in early June on expectations that a tightening labor market would spur big wage raises, which could further stimulate spending and overall economic growth later this year.

 

The rise in sentiment came despite higher gasoline prices, which contributed to producer prices recording their biggest increase in more than 2-1/2 years in May. Strong consumer confidence, together with a tightening labor market, bullish retail sales and firming inflation pressures may provide the Federal Reserve reassurance about the U.S. economic outlook amid expectations it will hike interest rates this year.

 

The upbeat consumer sentiment survey on Friday capped off a week of strong economic data and was the latest indication that growth was regaining momentum after a sluggish start to the second quarter.

 

The Fed has kept its benchmark overnight lending rate near zero since December 2008 and is not expected to raise rates before September.

 

The U.S. central bank's policy-setting committee meets on Tuesday and Wednesday. "While more progress needs to be seen before the Fed feels sufficiently confident in the sustainability of the recovery, they will certainly take comfort in the fact that things are beginning to move in the right direction," said Millan Mulraine, deputy chief economist at TD Securities in New York.