The Federal Reserve surprised markets this month by forecasting three interest rates during 2017; yet according to one economist, it's likely that the central bank will be "constrained" when it comes to raising rates.
"We're sort of, of the view that the Fed is constrained by not just its own inflation outlook, it's constrained by wage growth but it's also constrained by the rest of the world," James Pomeroy, global economist at HSBC, told CNBC on Thursday.
"And actually if you're in a world where as the Fed sort of continues to raise rates that you get a stronger dollar, that sort of hurts the emerging world, and actually that's a situation that will constrain what the Fed is able to do," he added.
As one of the world's most-watched central banks, the Fed has to take into account a number of factors that could affect the U.S. economy. At the start of 2016, several market watchers predicted that the Fed would raise rates three times over the course of this year; however the central bank only ended up hiking once.
This year has been a turbulent year, with Brexit, the U.S. election and geopolitics all having an impact on how financial markets perform.
As a result, the Fed has had to be alert to possible economic shocks. In June, the Fed held off raising rates a week before the U.K. voted to leave the European Union, with the central bank saying Brexit was a factor in the decision, as it could have consequences for the U.S.' economic outlook.