Economist: 2 Rate Hikes This Year, But Greece Is Wild Card

Two interest rate hikes would be appropriate this year and at least two more in early 2016, an economist said Wednesday, citing current economic conditions.

Joe Brusuelas, chief economist for the New York tax and consulting service McGladrey LLP, said one thing that might derail a September rate hike is a default by the Greek government.

"Roiled asset markets would likely cause the Fed to push back the timing of its first hike until 2016," Brusuelas said.

As expected, the Federal Open Market Committee said Wednesday that that the current target of between zero percent to 0.25 percent for the federal funds rate "remains appropriate."

Related Link: Fed Won't Raise Rates, Cuts 2015 GDP Forecast

The committee said it will raise rates "when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term."

Brusuelas said 15 members of the FOMC expect at least one rate hike this year and 10 anticipate two.

But seven members now expect a single increase, compared with just three in March, according to the New York Times, which said that officials are "once again leaning toward keeping interest rates lower for longer."

Brusuelas said news from the Fed implies rising long-term and mortgage rates, albeit still near historic lows, as the policymakers consider the timing of its first rate hike."

Related Link: Fed Rate Hike On Hold; Here's The Probability Of A 25 Basis-Point Hike Out To March 2016

The Fed revised down its 2015 growth projections, but it indicated a moderately quicker pace of growth over the next two years.

The committee left its inflation forecast intact with a move up to its targeted 2 percent by early 2017.

"Which is why the Fed may be better off embarking on its rate hike campaign sooner rather than later," in Brusuelas's view.