A semiannual survey of 195 economists conducted by the National Association for Business Economics said that the US economy would go into recession only if oil prices hit $100 a barrel but predicted that oil would not ultimately move that high.
The median forecast for next summer's oil price is similar to the present rate at about $75 a barrel. Terrorism continued to be the paramount short-term problem facing the US economy according to 34 percent of the respondents with energy and inflation following owing to the small prospects of other technologies substituting oil in the next decade.
Only 35 percent of respondents believed that the war in the Middle East would spread and most agreed that violence in that region would not result in major disruptions in oil supply to the US.
Earlier this month, Federal Reserve policy-makers decided to keep the interest rates unchanged at 5.25 percent after more than 2 years of a successive rate increases intended to curb inflation.
The percentage of respondents who expect the Fed will tighten further has dropped from 89 percent to 57 percent.
And while the majority of respondents at 71 percent say the current monetary policy is about right, the panel is spilt on where it should go with 29 percent wanting further rate hikes, 17 percent wanting cuts and 53 percent opting to leave rates at the current level.
The survey was taken in the first fortnight of August.
Picture Courtesy: www.flickr.com
Leave a comment