The U.S. economy grew by 3.7 percent during the second quarter. Economists differ on how the GDP data will impact the timing of an interest rate hike by the Federal Reserve. Shartia Brantley reports.
The U.S. economy is revving up. That's according to the latest GDP report, which showed it expanded at a 3.7 percent annual pace during the second quarter. This and other data, like jobs and housing, provide growing evidence the economy can handle an interest rate hike by the Federal Reserve this year. Bank of America's Emanuella Enenajor: SOUNDBITE: EMANUELLA ENENAJOR, SENIOR ECONOMIST, BANK OF AMERICA IN (ENGLISH) SAYING "Our baseline is for the Fed to hike in September. That assumes that market panic will calm down. If we see continued fear in markets, then there certainly is a risk to our baseline, that the Fed may want to delay that until October, December. That's a less likely scenario." But the inability to reach the Fed's two percent inflation target may make a hike in 2016 more plausible, says FAO Economics' Robert Brusca. SOUNDBITE: ROBERT BRUSCA, CHIEF ECONOMIST, FAO ECONOMICS IN (ENGLISH) SAYING "I don't think they have the basis for raising rates unless it changes its direction to us. If it changes it direction in the next meeting then it could possibly raise rates by December, but under the current framework I don't think it's able to raise rates until next year." 12:39:32 The next Fed meeting starts September 16th.