The Securities Industry and Financial Markets Association’s (SIFMA) roundtable of economists is forecasting U.S. economic growth to accelerate in the year ahead.
SIFMA’s Economic Advisory Roundtable released its latest outlook Thursday, forecasting that the economy will grow by 2.7% in 2014, up from a 1.9% rate in 2013. It expects GDP growth to begin the year at 2.5% in the first quarter, rising to 2.8% in the second quarter, and 3.0% for the final two quarters.
Unemployment is also expected to continue to improve in 2014. Survey respondents predict that the full-year average unemployment rate will decline to 6.7% in 2014, from 7.4% in 2013. And, it says that the outlook for inflation remains moderate.
“A strong housing market recovery, consumer spending and job growth were the most oft-cited upside risks to the forecast, while disappointing capital spending and housing recovery, rising interest rates and oil prices, and poor fiscal policy were noted as downside risks,” said Diane Swonk, chief economist at Mesirow Financial Holdings, Inc. and chairman of SIFMA’s Economic Advisory Roundtable.
The U.S. Federal Open Market Committee (FOMC) is expected to maintain its 0.0% to 0.25% target federal funds rate throughout 2014. The median forecasts for 10-year U.S. Treasury rates rising each quarter to reach 3.3% in December 2014. And, survey respondents were unanimous in their opinion that the FOMC would end securities purchases by the fourth quarter of 2014.