UPDATE 1-Fed seen leaving U.S. rates unchanged in 2019 -Mizuho

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FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie

NEW YORK (Reuters) – The Federal Reserve will leave U.S. interest rates alone for the rest of 2019, Mizuho Americas’ U.S. chief economist Steven Ricchiuto said on Thursday, a day after the central bank hinted it was open to lowering rates later this year.

Ricchiuto remains the few economists at the primary dealers, or the top 24 Wall Street firms which do business directly with the Fed, who reckon it will not ease credit this year.

Goldman Sachs changed its call on rate cuts after Wednesday. Its economists now expect one in July, followed by another in September, reversing their earlier forecast for low probability of a rate decrease.

Ricchiuto said the U.S. economy is on relatively solid footing despite some pullback in growth due to trade tensions between Beijing and Washington.

“The data are not going to require them to move all year,” Ricchiuto said. “The economy is on a lot better standing than the market has priced in.”

Interest rates futures implied traders expect the Fed would lower key borrowing costs by at least 75 basis points by year-end, according to CME Group’s FedWatch program.

Ricchiuto said the drag on business activities from the trade conflict is likely temporary and it would fade later this year, causing U.S. economic growth to accelerate by early 2020.

GRAPHIC: Trade tensions boost U.S. rate-cut expectations, click tmsnrt.rs/2KdE2by

Reporting by Richard Leong; Editing by James Dalgleish and Richard Chang

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