Business Economists Call For Higher Rates & Deficit Watch

The National Association for Business Economics, or the NABE, has continued on its call for a muted recovery.  But there are some key issues it has brought up.  The NABE sees a rate hike sooner than what Fed governors are telegraphing and much sooner than what many key market pundits are calling for.  But there is another issue to consider as well, and that is that the NABE is calling out against the huge deficits.

The group noted, “… a majority believes that a rise in interest rates is both likely and appropriate in the next several months.”  Eight out of ten respondents in the survey did not believe another stimulus package is warranted at this time.

On fiscal concerns, eight out of ten suggested that the long-term imbalance of the federal budget might impact the country’s ability to borrow.

The full report is here at the NABE.com site.

We had moved our target from late Q1-2010 to summer-2010 for any rate hikes.  That may be summer or may be fall, but the obvious answer is that rates can’t be taken any lower.

JON C. OGG