Karim Shadid, director and investment expert at BlackRock, the world’s largest asset management firm, said investors expect central bank meetings around the world to continue raising interest rates.
Shadid added in an interview with Al Arabiya today Thursday: “We expect US interest rates to rise by about 125 basis points to 5.25%. High interest rates will continue in the coming months.”
He pointed out that financial markets are wrong in their expectations from the US Federal Reserve to cut interest rates quickly in the second half of this year.
And he continued: “We expect Jerome Powell to hint in his next speech at maintaining high interest rates, up to 5.25%, while maintaining them until 2024.”
He explained that the most important factor for the stock and treasury markets in the current period is economic data, and not the results of companies, which this year show a divergence.
The US Federal Reserve raised interest rates last year to a range of 4.25% to 4.5%, expecting an additional 25 basis points hike at its next meeting on February 1st.
Read also: US Federal Reserve policymakers call for further rate hikes
The Fed’s policy committee will begin two-day meetings next week, and markets are looking for a 25 bp rate hike.
Meanwhile, markets expect the Bank of England and the European Central Bank, who will also meet next week, to raise interest rates by 50 basis points.
The European Central Bank is likely to continue tightening monetary policy.
