At the Future Investment Initiative conference in Saudi Arabia, prominent figures from the global financial sector suggested that expectations for multiple interest rate cuts by the Federal Reserve might be overly optimistic. When asked if they believed the Fed would cut rates twice more this year, none of the panelists from Goldman Sachs, Morgan Stanley, Standard Chartered, The Carlyle Group, Apollo Global Management, and State Street Corp raised their hands.
Most panelists agreed that the Fed might implement one more rate cut by the end of 2024. Goldman Sachs CEO David Solomon emphasized that it is challenging to consider monetary policy until after the elections, when there will be clearer insights into policy actions.
The Federal Open Market Committee recently decided, by an 11-1 vote, to lower the federal funds rate target range to 4.75% to 5%, following a year of maintaining rates at their highest levels in two decades. This marked the first rate cut by the Fed in over four years. Many traders anticipate the Fed will cut rates twice more this year, bringing rates to around 3.5% by the end of 2025.
BlackRock CEO Larry Fink shared at the forum that he expects at least a 25-basis-point cut from the Fed this year. He commented on the unprecedented level of inherent global inflation, suggesting that rates might not drop as low as some experts have predicted.
