Economists Split On Gasoline's Impact On Possible Fed Cut
As oil prices swing, gasoline keeps rising -- and some analysts have predicted $4-a-gallon gas this summer. Will higher prices at the pumps affect the U.S. economy? Jan Hatzius, Goldman Sachs' chief U.S. economist, and Julia Coronado, senior U.S. economist at Barclays Capital, weighed in, on "Power Lunch."
Hatzius disputed the idea that gasoline prices would rise that sharply, telling CNBC's Bill Griffeth that "$4 seems a little high." The economist said gas prices were merely one factor in America's economy, maintaining that "realistically, we have below-trend growth" in the U.S. -- and predicted that the Fed will cut rates this year.
Coronado agreed that gasoline prices won't reach such heights -- but she believes "the global economic boom" driving up prices will continue stoking the U.S. economy, as well. She said America's economic growth will pick up in the second quarter. That, along with the upward pressure from factors like gasoline prices, will signal the Fed to "put the brakes on," Coronado said.