Meredith Whitney, the former bank analyst known for her prescient 2007 warning ahead of the global financial crisis, cautioned that a US economic reckoning is coming in the fourth quarter as temporary boosts from the World Cup and residual fiscal spending fade. In a Bloomberg Television interview, Whitney noted that weekly credit card balances, a real-time gauge of consumer health, are now rising more slowly than in May, while Americans face higher gasoline prices. She expects the Federal Reserve to remain on hold on Wednesday, dismissing arguments for a surprise rate hike to bolster Chairman Kevin Warsh's credibility, and said the creation of five policy task forces gives Warsh several months before committing to a policy shift. Whitney also argued that elevated long-term Treasury yields are a fiscal issue driven by Washington's unwillingness to curb debt, and predicted JPMorgan Chase would most likely be the first major bank to pursue a transformational deal.
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