US growth rates likely coming closer to 3% for the remainder of the year - ING

FXStreet (Łódź) - Rob Carnell from ING takes a look at the current state of the US economy and suggests that despite some data disappointments in the first quarter, growth is seen picking up and it is possible that it will reach 3% for the entire year.

Key quotes

"The unemployment rate continues to trend downwards – it is becoming increasingly hard to take the Fed seriously when it talks about labour market slack."

"The inflation figures also do not argue strongly for a “do-nothing” policy approach, with PCE inflation and some measures of medium-term inflation expectations moving higher too."

"The small acknowledgements of labour market improvement and inflation normalisation in recent FOMC text are, we believe, harbingers of more substantial changes to the Fed’s rhetoric at the 17 September FOMC meeting – perhaps even including a hint at earlier tightening than they have hitherto been suggesting."

"We see a bigger role for the reverse repos and term deposits in the initial stages of any shift in policy stance, to drain liquidity from the system and get supply and demand moving back towards a more balanced setting."