A US bank rate hike is set to take effect on December 1, the first day of the bank holiday that will also include bank holiday payments.
A Reuters poll on Wednesday found that 52% of respondents in the US expect the Federal Reserve to raise its benchmark interest rate to a maximum of 1.75% in December.
The Fed’s policy committee is set by Congress to meet on December 13 and the decision on when to raise rates has not yet been made.
However, there is growing concern that a rate hike by the central bank could be too early and lead to a recession.
A rate hike could push inflation to levels not seen since the global financial crisis, a time when many people in the United States are still struggling to make ends meet, said Michael Salerno, chief market strategist at Bank of America Merrill Lynch.
“The Fed is now in a position to be more aggressive in its monetary policy decisions and potentially to start a recession,” Salerno said.US retail sales rose 0.3% in February, the weakest since April and the first decline since November.
The US retail sales index, which measures consumer spending, fell 0.4% in January, the biggest decline since June.
The Federal Reserve raised rates in December to support the recovery, but inflation was already falling.
The economy has been recovering from a deep recession in the early years of the recovery and a stronger economy is expected to bring higher wages and job opportunities to the US economy.
A stronger dollar could also boost the cost of imported goods and could push up the price of many goods and services.
“If the Fed is going to raise interest rates in January the sooner it starts the better it is going a dollar will go,” Salenum said.
The index of retail sales, which excludes consumer spending such as autos and furniture, rose 0,4% last month.
The S&P 500 index of professional, scientific, technical and management services, which includes retail, also rose 0% in the month.