U.S. Rate Hike Coming

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    Economists at the Bank of Nova Scotia expect the U.S. Federal Reserve Board to start normalizing interest rates in the second quarter of 2015, rather than the fourth quarter, which was the previous call. Janet Yellen, the Fed chairwoman, has provided guidance indicating that rate hikes could begin within six months of the end of the Fed’s bond purchase program, which Scotia expects by October of this year, However, Scotia notes that there are risks in both directions as the bond purchase program could end either earlier or later than expected. And, it says that “bringing forward the starting point does not lead us to materially alter our projected level for short-term interest rates by the end of our forecast horizon.”