Rob Carnell, Chief International Economist at ING, suggests that last month, amidst global financial upheaval, and a growing chorus of concern that the US was heading for recession, they trimmed their growth forecasts to around two percent (1.9%), and removed one of the two (25bp) Federal Reserve rate hikes we had pencilled in for 2016. Key Quotes “At the time, we anguished over whether we had been too cowardly in not removing all of the tightening forecast for 2016. After all, financial markets were no longer pricing in any tightening this year, and very little in 2017. But even then, with some fairly soft data to contend with, the cries of “recession” were somewhat speculative. Our stance since then has been to look for an excuse to remove the remaining hike and trim GDP further. But the last four to five weeks has not delivered anything that could be construed as definitive in terms of the recession story. And if anything, the data has been slightly firmer on average than during the preceding month, backing up our expectation for growth of about 2.0% in 1Q16. Lack of clarity cannot be making the Federal Reserve’s job any easier. Recent rhetoric from them seems to rule out any near term (March 16) tightening. But equally, much more bad data will likely be needed to cause the Fed to change direction and start to ease again, though a growth negative bias does seem to be creeping into the rhetoric. For the time being, we still give the US economy the benefit of the doubt. But as recession is as much a “state of mind” than it is a straight macroeconomic event and subject to fickle changes of household, corporate and market sentiment, this could change rapidly.” For more information, read our latest forex news.