Corporate Economists Warn of Rising Rates: Corporate Economists: Rates Rising
HOT SPRINGS, Va., May 11-Economists for some of the nationÛªs biggest corporations foresee a generally healthy economy for the remainder of 1984, but warn of a gradual but continuing rise in interest rates into 1985.</br></br>A ÛÏgrowing minorityÛ of the corporate economists anticipate a recession beginning at the end of 1985 unless significant action is taken to reduce the federal budget deficit, said John R. Opel, chairman of International Business Machines Corp.</br></br>Opel presented the economic forecast to members of the Business Council, the top executives of nearly 100 major corporations and financial institutions, who are holding their spring meeting here this week'.</br></br>Several of the 19 corporate economists who participated in the forecast said the prime lending rate could reach 15 percent next year, from its current level of 12.5 percent. The majority, however, expects an increase of perhaps one percentage point during 1984 and 1985. (The projection was made shortly before the most recent increase in the prime.)</br></br>Citicorp Chairman Walter B. Wriston said there could be a further increase of about one-half a percentage point in rates in the near future: ÛÏIt depends on what the Fed does.Û Wriston said the Federal Reserve BoardÛªs recent actions are keeping the growth rates of the money supply ÛÏa little bit on the tight sideÛ compared with the FedÛªs growth targets. ÛÏIÛªd be happier if they were higher,Û he said.