BlackRock CEO, Larry Fink, recently made a prediction about the Federal Reserve cutting rates before the end of the year. He believes that there will be a rate cut of at least 25 basis points by the end of 2024. This aligns with the forecast made by his firm, which anticipates a rate cut of 25 to 50 basis points before the year is over.
Despite his prediction, Fink also issued a warning about the current state of inflation. He stated that there is a significant level of embedded inflation, which is higher than ever before. This could impact the extent to which rates will be lowered, as they may not be as low as initially anticipated.
In terms of market expectations, traders are already pricing in another 25 basis points rate cut for next week. Additionally, there is an expectation of approximately 43 basis points worth of rate cuts for both the upcoming meeting and the December meeting combined.
Fink’s prediction and warning provide insight into the potential future actions of the Federal Reserve and how they may impact the market. It will be important to monitor any developments in the coming weeks to see how these predictions play out. In the meantime, investors and traders should stay informed and be prepared for potential shifts in interest rates and market dynamics.
