WASHINGTON, June 26 (Reuters) - A key securities and financial markets industry group on Tuesday forecast that the U.S. economy will grow moderately this year and next as troubles in the housing market wind down.
The Securities Industry and Financial Markets Association forecast 2.2 percent gross domestic product (GDP) growth in 2007 and 2.8 percent in 2008.
Rising energy prices and a sudden rise in long-term interest rates are likely to weigh on the consumer and drag out the moderate growth.
"It's likely to prolong the housing contraction," said David Resler, Chief Economist at Nomura, of the recent rise in long-term rates. "I think the jump in long-term rates may prolong the period that the U.S. is not out of the woods."
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