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U.S. Economic Growth Slows, Further Delaying Fed Rate Hikes

U.S. economic growth slowed sharply in the last few months of 2015, and that means the Federal Reserve will be on hold for a lot longer, according to one expert.

U.S. economic growth slowed sharply in the last few months of 2015, and that means the Federal Reserve will be on hold for a lot longer, according to one expert. Fourth quarter GDP edged up just 0.7 percent, slowing considerably from the 2 percent growth rate in the third quarter. ‘I think consumers continue to be retrenching,’ said Craig Bishop, Lead Strategist for U.S. Fixed Income at RBC Wealth Management, who pointed out that savings rates also rose in the quarter. In its statement following this week’s policy meeting, the Fed indicated it was paying close attention to the slowdown in the economy. Bishop doesn’t expect another move by the Fed until at least the summer, if not longer. The economic slowdown also has implications for fixed income investors who have been plowing money into the bond market all this month, sending yields lower even as the Fed has tried to normalize policy and lift interest rates. Bishop spoke with TheStreet’s Rhonda Schaffler.

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