The American Bankers Association today forecast strong US job growth and moderate inflation, and said the Federal Reserve would likely raise interest rates a quarter of a percentage point at its meeting next week.
"Moderate inflation should allow the Fed to pursue a strategy of gradually raising rates for the balance of the year," Ms Lynn Reaser, chairwoman of the ABA Economic Advisory Committee, said in a statement.
The group said it saw US real gross domestic product growing at an annual rate of close to 4.5 per cent for the rest of the year and by nearly 4 per cent in 2005.
The committee said it believed the economy could easily withstand interest rate increases, and forecast monthly job gains averaging 250,000 or more for the remainder of 2004.