The U.S. central bank is not likely to raise interest rates at this time and may delay expected rate hikes for a while.
That is the finding of a survey of economists by the financial news network CNBC. The rate-setting committee of the U.S. Federal Reserve gathered in Washington for their regularly scheduled meeting Tuesday, and will report a decision this afternoon.
Many economists told the network that global economic weakness as well as recent drops and wild swings in stock and oil prices mean Fed officials may delay their next rate hike till May.
The Fed raised rates slightly from record-lows late last year and was expected to continue raising rates, very gradually over the next year.
Low interest rates tend to stimulate economic growth, but can also spark damaging inflation and other serious problems if they stay too low for too long.
The key U.S. benchmark rates had been cut to near-zero during the financial crisis in a bid to boost economic growth and jobs. Since then, economic growth resumed, and the unemployment rate has fallen by half.
The improving job market and low gasoline prices are encouraging consumers, according to consumer confidence studies by the Conference Board and the Consumer Technology Association. Analysts at Wells Fargo Bank said improving business conditions mean consumers shook off recent stock market chaos.
Economists watch consumer attitudes closely because consumer demand drives two-thirds of all U.S. economic activity.
Both market volatility and rising consumer confidence are related to lower oil prices. A World Bank study published Tuesday lowered its predicted oil price for this year from $51 a barrel to $37, which is higher than the current price.
World Bank experts say oil prices are likely to remain at relatively low levels for some time, but will probably increase at least a little from recent market lows.
The bank’s experts say low prices are forcing some high cost producers to stop pumping oil. At the same time, they expect recovering economic growth to increase demand for energy. Together, those two factors will bring oil supply more in line with demand, which should bring prices up a bit.