PIMCO: Fed to hike in mid-2015
According to the Pimco's chief economist Paul McCulley, the US economy is getting closer to where the Federal Reserve needs it to be to start tightening. He expects the first hikes to come in mid-2015. Rates are expected to increase until 2%.
While gross domestic product and productivity plummeted in the Q1, McCulley does not think that will be repeated in Q2 of the year 2014. "The fact that consumer income and job creation held up I think is the silver lining in what happened in the negative productivity in the first quarter," McCulley said.
James Bullard, head of the Federal Reserve Bank of St. Louis, said last week the Fed should raise rates by the end of Q1 2015. In his view, the Fed will raise rates until 4%.