Economists Expect More Rate Hikes

The record-breaking U.S. economy will turn in solid growth this year and in 2001, but the Federal Reserve will have to raise interest rates at least twice more, business economists forecast Tuesday. A sudden plunge in the high-flying stock market remains a threat.

In its latest economic outlook, the National Association for Business Economics predicted that economic growth will slow to 3.8 percent this year and 3 percent in 2001.

The business economists’ forecast represents an upward revision from a November outlook that saw a bigger slowdown this year to 3.2 percent growth in the gross domestic product. The GDP has expanded by 4 percent or more in each of the last three years.

Economists believe the Fed will play a more active role in boosting interest rates to raise borrowing costs for big-ticket items such as cars and homes, in that way slowing economic activity.