Thursday, 23 May 2024

BofA: Fed’s interest rates policy constitutes a real danger

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Bank of America economists stressed that there is a real risk that the US Federal Reserve will keep interest rates unchanged until March of next year.

The bank maintained its expectations that the Federal Reserve would cut interest rates next December, compared to previous expectations of 6 cuts that markets were pricing in at the beginning of this year.

Traders in the markets are now pricing in a 71% probability that the Fed will cut interest rates for the first time next September, compared to a 44% chance that the Fed will cut interest rates in July, according to Al Arabiya.

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“For now, given the strength of the labor market and the progress on inflation so far, it is appropriate to allow restrictive policy more time to work, and to let changing data and expectations guide us,” Powell said at a forum in Washington.

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