ISI's Hyman Says Fed Will Lower Rate to 4% as Inflation Recedes By Bob Willis and Carol Massar
Aug. 29 (Bloomberg) -- The Federal Reserve will probably cut its benchmark interest rate to 4 percent as slowing U.S. economic growth restrains inflation, said Edward Hyman, chairman of International Strategy and Investment Group. ``They will start to ease in a measured way, 25 basis points every meeting,'' Hyman said in an interview in New York. ``I think the economy will react favorably to it.'' Hyman said he sees a ``better economy next year,'' with stocks and Treasury yields rising. Slacker growth this year will ``put inflation aside'' as a concern, he said. The deepest housing recession in 16 years is weakening the economy after the Fed raised its benchmark interest rate 17 consecutive times from June 2004 to June last year. As global credit markets seized up, the Fed on Aug. 17 lowered its discount rate. Traders are betting on a reduction in the federal funds rate, currently at 5.25 percent, at the Fed's next policy meeting Sept. 18. ``I do not think we will have a recession,'' he said. ``I think it will go to 1.5 percent growth. That will be the low point.'' To contact the reporter on this story: Bob Willis Washington at [EMAIL PROTECTED] .
