US economy at a cross-roads – Nomura

FXStreet (Guatemala) – Analysts at Nomura explained that the US economy is at a crossroads. Since the fall of 2010, the unemployment rate has fallen steadily, from 9.8% in late 2010 to 5% now.

Key Quotes:

“These declines in the unemployment rate have been achieved with growth that has averaged only about 2%, which implies that potential growth has slowed substantially. The FOMC has acknowledged that the economy is close enough to full employment that it now needs to begin the process of raising rates.”

“The FOMC’s intent appears to be to slow the rate of growth of the US economy to a pace that is consistent with a reduced rate of potential growth. We expect the FOMC to begin the process of adjusting rates at its meeting later this month, but we think only a gradual and limited adjustment of short-term interest rates will be needed to meet the FOMC’s macroeconomic objectives.”

Analysts at Nomura explained that the US economy is at a crossroads. Since the fall of 2010, the unemployment rate has fallen steadily, from 9.8% in late 2010 to 5% now.

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