Moody's downgrades U.S. 2016 growth forecast to 2% from 2.3%

Moody's Investor Service cut its 2016 growth forecast for the U.S. economy to 2% from 2.3%, citing subdued global demand and weak business investment. Moody's 2016 growth outlook for advanced markets is 1.7% in 2016, down from 1.9% in 2015, according to the agency's Global Credit Research report released Wednesday. "The global recovery has weakened further and the outlook across countries remains uneven and largely weaker than in the previous two decades," said Elena Duggar, an Associate Managing Director at Moody's. The ratings agency said a more pronounced slowdown than expected from China's economy is currently one of the biggest risks to the global economy. In its U.S. analysis, Moody's predicted the Federal Reserve will lift benchmark interest rates twice this year, at most, and make the moves gradually to prevent potential disruption for capital markets and growth. Moody's said U.S. consumption would continue to strengthen through the rest of the year, but the economy will see drag from subdued external demand and low energy prices on industrial production and business investment.

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