A top bank economist has predicted the US Federal Reserve will jack up interest rates next June.

HSBC’s Ryan Wang said the likely move signalled recovery in the American economy — and a divergence of policy from Europe and Japan.

New York-based Mr Wang added: “It’s a reflection of the progress the US economy has made over the past few years — the labour market has continued to improve, unemployment has fallen below six per cent and inflation is running about one and half per cent.”

He added: “Financial markets are very focused on the issue of Fed policy normalisation. One of the interesting considerations is that the Fed is hoping to raise rates while Europe and the banks in Japan are considering more easing.

“US growth for the year ahead looks like it will be faster than in the Eurozone.”

And he added that could put “more upward pressure” on the US dollar.

Mr Wang was speaking after holding a seminar for clients on the US economy and Federal Reserve policy at the bank’s Harbourview HQ on Hamilton’s Front Street last Friday.

He said: “The US economy has returned to its pre-recession level in terms of growth and employment — that hasn’t been the case in the Eurozone.”

Mr Wang added that Europe was “struggling” to sustain growth and its central bank had been attempting to support recovery by pegging rates.

He said: “It’s a mix — the good news is the global economy is growing, but the pace of growth is likely to remain somewhat subdued. That means growth for the big economies and Bermuda will be somewhat subdued.

“The global economy is growing, but it’s still struggling to gain traction.”

And Mr Wang warned that expectations for growth “might be too high.”

He said: “There are still lingering effects from the great recession and the financial crisis.”

The Fed has pegged rates near zero since the recession hit in 2008 and has nearly quadrupled its balance sheet to more than $4 trillion through a programme of bond buys in a bit to force borrowing costs down and increase employment.

Mr Wang works for HSBC Securities and helps formulate HSBC’s view of the outlook for the US economy.

This includes projections for growth, inflation, monetary policy, and the direction of interest rates.

He has also written about issues such as the budget challenges facing US state and local governments, prospects for the US housing market and the outlook for the unemployment rate.

Mr Wang meets regularly with HSBC’s institutional clients, which includes central banks, money managers, hedge funds, and large corporations.