Larry Fink, the CEO of Blackrock, has predicted that the US Federal Reserve will cut interest rates again before the end of the year. However, he warned interest rates will not go as low as many people might expect.
“I think it’s fair to say we’re going to have at least a 25 [bsp rate cut],” Fink said during a panel hosted in the eighth edition of Saudi Arabia’s Future Investment Initiative, the flagship economic conference at the heart of the Kingdom’s Vision 2030.
During the panel, he highlighted his belief that there is currently “more embedded inflation in the world than we’ve ever seen”, discussing the contrast between a “more consumer-driven economy” of the past and current “more inflationary” government policies.
“No one is asking to question: At what cost?” said the head of the world’s largest asset management company.
In September, Earlier this month, the US Federal Reserve cut interest rates by a surprising 50 basis points. The move lowered the benchmark policy rate to a range of 4.75%-5.00%, the first reduction of its kind in over four years. It marked a significant shift in its monetary policy amid concerns over the labour market and global economic outlook.
During the Riyadh summit, other experts also weighed in on interest rate cuts. Not one executive in a panel that included the heads of Goldman Sachs Group Inc., Morgan Stanley, Standard Chartered Plc, Carlyle Group Inc., Apollo Global Management Inc. and State Street Corp., stated they believed there would be more than one rate cut this year, with some stressing the need for more clarity on the US election result before anticipating Fed policy.
“It is hard to think about monetary policy” until “you get through the election and we get a clear sense of policy actions,” said Goldman’s Chief Executive Officer David Solomon.
A majority of panel members agreed there might be one more reduction in 2024.
