Monday, May 10, 2004
The U.S. economy is expected to grow a healthy 4.6 percent this year, with inflation picking up as producers pass on the cost of rising commodity prices to consumers, a panel of top forecasters said Monday.
The survey found panelists expected the gross domestic product (GDP) price index to rise 1.7 percent this year, while the consumer price index was projected to rise 2.1 percent. Both forecasts were nudged up 0.2 percentage points from the month-ago prediction.
The forecast for growth in the CPI, the best-known measure of price pressures facing consumers, is up half a percentage point since February.
Prospects of rising inflation are expected to prompt interest rate hikes this summer from the Federal Reserve, which has held rates at 1958 lows of 1 percent since June.
The panel said the Fed will likely hike interest rates by "at least" 50 basis points by year-end.
GDP growth was forecast to cool to 3.8 percent in 2005.
By: DocMemory
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