The market is increasingly doubtful of the movements that the American Federal Reserve (Fed) could make during the next monetary policy meetings. The organization suggested in its September projections that the price of silver could be reduced by another 50 basis points before the end of the year at the two current meetings. But investors are not as clear after the release of macroeconomic data.
Some of Wall Street’s top bankers have shown these doubts this Tuesday, during an event at Future Investment Initiative from Saudi Arabia. Asked if they thought there would be two more rate cuts this year, no leader from a panel that included the heads of Goldman Sachs Group, Morgan Stanley, Standard Chartered, Carlyle Group, Apollo Global Management and State Street didn’t raise a hand. according to Bloomberg. From the agency they explain that “most agree there could be further reduction by the end of 2024“.
BlackRock CEO Larry Fink made similar comments on Tuesday. “The world is experiencing higher inflation than ever before,” he said. “We’re not going to see interest rates as low as some predict“, he estimated.
Election week
THE The next meeting will take place on November 6 and 7Wednesday and Thursday of next week, instead of the usual Tuesdays and Wednesdays when Fed members are always convened, the conclusions will therefore only be made public this Thursday. The reason is none other than the holding of the elections for the presidency of the United States on Tuesday, November 5.
The elections also shape expectations for what the Fed can do in the coming months. ““It’s difficult to think about monetary policy” until “the elections are over and we don’t have a clear idea of policy actions.”“, said David Solomon, CEO of Goldman Sachs during the event organized on Tuesday.
“The economic cycle will not change on November 6, the day after the US elections. But the political mix could take a different direction, and financial markets will try to price it in. To some extent, it is possible that this is already the “So with rate expectations and the dollar rising as polls tilt in Trump’s favor, although recently released strong data likely explains most of the moves,” analysts at J. Safra Sarasin said. Sustainable AM in a report.
In September, 11 Fed members voted to cut rates to a range of 4.75% to 5%, after holding them at their highest level in two decades for more than a year, proceeding thus the first decline in more than four years.
