(Bloomberg) — Some of the world’s biggest names in finance, gathered at Saudi Arabia’s Future Investment Initiative, appeared to suggest that the market’s bets on interest rate cuts by the Federal Reserve may be exaggerated.
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Asked whether they thought there would be two more rate cuts this year, not a single executive on 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., raised their hands.
The majority agreed that there could be a further reduction at the end of 2024.
“It’s hard to think about monetary policy” until “the election passes and we have a clear sense of policy actions,” Goldman CEO David Solomon said.
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In September, the Federal Open Market Committee voted 11 to 1 to lower the federal funds rate to a range of 4.75% to 5%, after holding it for more than a year at its highest level in two decades. It was the Fed’s first cut in more than four years, and many traders see policymakers cutting rates twice more this year, and to around 3.5% by the end of 2025.
BlackRock Inc. CEO Larry Fink made similar remarks earlier Tuesday.
“We have more embedded inflation in the world than we’ve ever seen,” he said on a panel. “We’re not going to see interest rates as low as some people have predicted.”
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