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Barclays sees U.S. Fed rate hike in early 2016

A "no parking" road sign is seen in front of a Barclays branch in downtown Rome May 8, 2014. REUTERS/Max Rossi

NEW YORK (Reuters) - Barclays' U.S. economists pushed out their forecast on the timing of a rate increase from the Federal Reserve to March 2016 from their earlier call of September in the wake of recent volatile market conditions due to anxiety about the Chinese economy.

"Although we continue to see economic activity in the U.S. as solid and justifying modest rate hikes, we believe the Federal Reserve is unlikely to begin a hiking cycle in this environment for fear that such a move may further destabilise markets," Barclays' economists Michael Gapen and Rob Martin said in a research said.

Should market conditions stabilise and prove transitory, Fed policy-makers could the end its near zero interest rate policy at their December meeting, they said.

(Reporting by Richard Leong, Editing by Franklin Paul)