The Fed could be forced to reverse rate hikes

THE US Federal Reserve is slowly raising the cost of borrowing after seven years of exceptionally loose monetary policy. But by taking so long, there's a danger the central bank under Chair Janet Yellen may need to cut rates again relatively soon. While a swift retreat might be insignificant on paper, the Fed's credibility would suffer.

The United States' GDP will grow by 2.3 per cent in 2016, according to Goldman Sachs, after expanding 2.5 per cent in 2015.

The unemployment rate, now at 5 per cent, could dip lower, and the rate of inflation is below 2 per cent. This all fits the Fed's mandates covering full employment and stable prices, though Ms Yellen et al would prefer stronger price increases.