CHICAGO--(BUSINESS WIRE)--Mesirow Financial’s chief economist is optimistic about the year ahead, quipping, “Economic expansions are like fine wines: They improve with age.” Diane Swonk predicts that the biggest boost will come from the U.S. consumer who will finally have more cash in hand. “Consumer spending is expected to be a primary driver of gains with a reacceleration in wages finally adding to the income created by rising employment and falling prices at the gas pump. An increase in the minimum wage across almost half of the states virtually ensures a pop in wage growth in the first quarter.” Her forecast also includes modest wealth effects from improving home values and stock market gains.
Another major player to watch in 2015 is the Federal Reserve. “The Fed is widely expected to begin liftoff in 2015, which will be the first rate hike since 2006.” Swonk adds that, “The pace of increases, however, is expected to be gradual, with the fed funds rate ending the year at 0.75%, still one percent below overall inflation.” She explains that will mean monetary policy is “still highly accommodative.”
Read Themes on the Economy to learn why Diane Swonk is keeping an eye out for risks to the outlook, mainly from Europe. Or, watch a video discussion of Diane Swonk and her colleague, Adolfo Laurenti, weighing factors likely to sway the balance for growth next year. Archived issues can also be found at mesirowfinancial.com.
Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with approximately 1,200 employees globally. With expertise in Investment Management, Global Markets, Insurance Services and Consulting, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information about Mesirow Financial, visit its website at mesirowfinancial.com.