Hawkish Fed if unemployment beats expectations

[SINGAPORE] Unemployment in the US will fall faster than the Federal Reserve expects, said Keith Wade, chief economist and strategist of fund manager Schroders.

This can lead to wage growth that ultimately results in the Fed raising interest rates - which would have implications for global markets, he said.

"By the end of this quarter, sentiment in the market will be quite different. If we get 3.5 to 4 per cent rebound (in Q2 GDP), we'd expect the Fed to sound a bit more hawkish," he said in an interview yesterday.

Mr Wade was weighing in on a key debate in markets on when interest rates will rise. Rising rates have the potential to destabilise financial markets, like they did in the third quarter...

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