- BlackRock, Bank of America, and others are stating that interest rate cuts are not expected in the coming months, and they have postponed plans to start cutting rates until March.
- Laura Cooper, in an interview with Bloomberg on January 19, stated that the U.S. Federal Reserve
will not start an interest rate cut in March.
- Bank of America (BofA) and other bank analysts also reported that the Fed postponed interest rate cuts to the third quarter.
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Asset manager BlackRock shares predictions about when the Fed will make interest rate cuts: Here are the details!
BlackRock Discusses Fed’s Interest Rate Cuts
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BlackRock, Bank of America, and others are stating that interest rate cuts are not expected in the coming months, and they have postponed plans to start cutting rates until March. The U.S. Federal Reserve kept interest rates between 5.25% and 5.5% stable in its third meeting in December, citing persistently low inflation and the Fed officials’ expectation of a soft landing.
Laura Cooper, Senior Macro Investment Strategist at BlackRock, stated in an interview with Bloomberg on January 19 that the U.S. Federal Reserve will not start an interest rate cut in March. She added that data showing the resilience of retail sales this week clearly demonstrates the resilience of the U.S. economy and that the Fed could delay interest rate cuts.
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Cooper pointed out that inflation is still above their 2% target. She expects the Fed to start cutting rates in June, before the European Central Bank (ECB). Cooper predicts that the Fed will cut rates by 75-100 basis points by the end of the year.
She mentioned that the first interest rate cut will be made “immediately after the European Central Bank,” and the Bank of England could also go for an interest rate cut after the European Central Bank. The European Central Bank will need to make a larger interest rate cut. Traders are betting that the Federal Reserve will cut rates for the first time in May; Cooper said the market is “very active” in pricing, and added, “There is still some pricing needed, which convinces us that there will be some volatility in the future.”
Bank of America (BofA) and other bank analysts also reported that the Fed postponed interest rate cuts to the third quarter. Also, hawkish Federal Reserve officials such as Atlanta Federal Reserve President Raphael Bostic and Fed Governor Christopher Waller limited expectations of interest rate cuts in March by opposing aggressive policy easing bets this week. Data released on Thursday showed that jobless claims unexpectedly dropped to 187K, the lowest level since September of last year.
Laura Cooper of BlackRock also expects a strong U.S. dollar this year, which could hinder the Bitcoin rally when Bitcoin halving approaches. A strong U.S. dollar creates selling pressure on Bitcoin. The U.S. Dollar Index (DXY) made a turnaround from 101 to above 103.50 in early January.