On a dime

Article Abstract:

US interest rates are forecast to rise due to faster economic growth with civilian employment and durable goods orders both increasing, along with hourly earnings. US rates could reach 6% by Jul 1997, according to Salomon Brothers' Robert DiClement. Share prices could suffer if interest rates are raised, though this may not occur if rates are raised by less than expected. Real interest rates are high and banks are cautious about lending, while consumer confidence has dropped, so rates may not rise sharply.

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Wall Street: rate debate

Article Abstract:

There is a division of opinion as to whether US interest rates will be raised or lowered from May 1996. The decision will depend on rates of growth for US gross domestic product, and trends in consumer price inflation. David Resler from Nomura Securities forsees lower rates, while Stephen Roach from Morgan Stanley foresees higher rates. Both see rates as unlikely to be raised in Jul 1996, and raised are also not likely to be raised prior to a general election.

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US interest rates: due to rise?

Article Abstract:

There is a debate on US interest rate policy, with some indicators that rates could be raised. Sales of new homes in Jul 1996 were up by 7.9% and durable goods orders are up. US economic growth is forecast to slow in 2nd half 1996 but this may not occur. Inflation trends are important as well as economic growth, and low consumer price inflation could mean that interest rates stay stable even if economic growth does not slow and unemployment is low.

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