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Analysts Expect Fed To Cut Interest Rates This Summer

Wednesday, 7 Mar 2007 | 11:19 AM ET

David Wyss, chief economist at Standard & Poor’s told CNBC’s “Morning Call” that he expects the Federal Reserve to cut interest rates this summer.

“I think the unemployment rate is going to continue to tick up," he said Wednesday. "That’s a lagging indicator, but it’s a very important indicator for the Fed and for voters.”

Steven Wieting, director of economic and market analysis at Citigroup, said inflation has “absolutely been tamed.”

“I think a modest easing step is much more likely out of the Fed than anything else,” Wieting said. “I think that the U.S. economy underperformed its labor markets the past year. Looking into the second quarter data beyond Friday’s news, I would expect some of the labor market news to soften and under-perform the U.S. Economy a bit.”

Wyss said about 45% of the world’s growth came from China and the U.S. and both economies show signs of slowing.

“There are a number of engines, but there are two big ones and when the big ones slow down, the world is going to slow down,” he said.

Strength of the Global Economy
Experts are having a hard time coming to a consensus on the markets. Steven Wieting, Citigroup director of economic & market analysis, and David Wyss, S&P chief economist, share their views with CNBC's Mark Haines