Economists ditch calls for Federal Reserve interest-rate hike

Economists are pushing back their calls for the next Federal Reserve interest-rate hike in droves. Trouble overseas and uncertain economic conditions at home have helped move the median forecast to June from March.

Nearly 68% of economists say the Fed will next raise rates in June, according to a Bloomberg analysis of 53 firms that contribute forecasts. That compares with 30% in January, when a majority estimated the next increase would come at the March meeting. Economists at Deutsche Bank Securities had the biggest revision in the Bloomberg survey, moving their call for the nearest hike to December after previously seeing an increase next month.

“Forget about March, forget about June,” said Brett Ryan, a US economist at Deutsche Bank in New York.

Delivering the semiannual testimony to Congress on Thursday, Chair Janet Yellen “made it clear that it’s going to take some time for the Fed to be comfortable that this most recent bout of volatility isn’t going to materially impact the economy,” he said.

Standard Chartered Bank-—which previously called for one rate hike in March followed by a cut in December—has removed its rate rise forecast entirely. While “a lot has happened” since the Fed in December raised its benchmark federal funds rate for the first time in nearly a decade, Yellen told the Senate Banking Committee that she hasn't yet seen enough of a downturn to prompt the central bank to cut interest rates. Fed officials have said that economic data will guide future decisions. Growth in the US decelerated to a 0.7% annualised rate last quarter.