By Howard Schneider
A recent survey of economists highlights a potential mistake by the U.S. central bank in setting interest rates as the main risk to the economy over the next year. According to the National Association for Business Economics, 39% of economists surveyed see a "monetary policy mistake" as the greatest downside risk, compared to other factors like the presidential election and conflicts in Ukraine and the Middle East.
The focus is on the Federal Reserve as it aims to balance easing monetary policy to combat inflation and prevent a significant rise in unemployment. Fed Chair Jerome Powell is set to speak on Monday, addressing the recent interest rate cuts and the future outlook for the economy.
The panel of economists predicts a slowdown in U.S. economic growth next year, with increasing risks to the economy overall. While the Fed is expected to continue cutting rates, concerns remain about the potential impact on inflation and economic growth.
Analysis:
The survey indicates that the U.S. economy faces risks from potential mistakes in monetary policy, which could impact economic growth, inflation, and unemployment. The Federal Reserve's decisions on interest rates will be crucial in determining the future trajectory of the economy. Investors should closely monitor Fed announcements and economic indicators to make informed decisions about their finances.