First quarter weakness in gross domestic product and lowered expectations for the second quarter resulted in the National Association for Business Economics Outlook Survey panel reducing its forecast for real GDP growth down to 2.3% for fourth quarter 2014 to fourth quarter 2015.
The prediction for 2016 growth remained 2.9%
The forecast for calendar 2015 was cut to 2.4% from 3.1% in the prior survey.
Q2 2015 projections were cut to 2.5% growth from 3.0% in the prior survey, while a rebound to 3.2% is seen in the third quarter.
As for when the Federal Reserve will begin monetary policy normalization, panelists now lean toward the third quarter (74%) or the fourth quarter or later (21%), with 4% seeing rates rise in the second quarter. In the earlier survey, "one-third of panelists predicted a second-quarter increase, 55% expected a third-quarter increase, and only 12% believed an initial rate hike would occur in the fourth quarter of 2015 or later," according to a press release.
The median prediction for the fed funds rate at yearend is 0.5%, down from 0.25% projected in the earlier survey. For 2016, the expectation is a 1.625% rate, off from the 2.0% projection earlier.
