August 24, 2015 / 4:56 PM / 4 years ago

Barclays sees Fed rate hike in early 2016

Federal Reserve Chair Janet Yellen attends a news conference after chairing the second day of a two-day meeting of the Federal Open Market Committee to set interest rates in Washington June 17, 2015. REUTERS/Carlos Barria

NEW YORK (Reuters) - Barclays’ U.S. economists pushed out their forecast on the timing of a rate increase from the Federal Reserve to March 2016 from their earlier call of September in the wake of recent volatile market conditions due to anxiety about the Chinese economy.

“Although we continue to see economic activity in the U.S. as solid and justifying modest rate hikes, we believe the Federal Reserve is unlikely to begin a hiking cycle in this environment for fear that such a move may further destabilize markets,” Barclays’ economists Michael Gapen and Rob Martin said in a research said.

Should market conditions stabilize and prove transitory, Fed policy-makers could the end its near zero interest rate policy at their December meeting, they said.

Reporting by Richard Leong, Editing by Franklin Paul

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