BlackRock: We expect US interest rates to rise to these levels

Karim Shadid, director and investment expert at BlackRock, the largest asset manager of the world, said there is a state of anticipation among investors for central bank meetings globally to continue raising interest rates.

Shadid added, in an interview with Al-Arabiya, today, Thursday: “We expect an increase of about 125 basis points in US interest rates, to reach the level of 5.25%. The high interest rates will continue in the coming months.”

He pointed out that financial markets are incorrect in their expectations of the US Federal Reserve rapidly cutting interest rates in the second half of quest’year.

He continued, “We expect Jerome Powell to hint in his next speech about keeping interest rates high, to hit 5.25%, holding them through 2024.”

He explained that the most important factor for the stock and treasury bill markets over the period in course are the economic data and not the results of the activity of the companies, which questyear show a divergence.

The US Federal Reserve raised interest rates last year in a range between 4.25% and 4.5%, with expectations of a further increase of 25 basis points at the next meeting on February 1st.

US Federal Reserve policymakers call for more rate hikes

The Fed’s policy committee will begin two-day meetings next week and markets are expecting a 25 basis point rate hike, which is lower than the one announced by the central bank last year when it raised rates by 50 basis points and 75 basis points.

Meanwhile, markets expect the Bank of England and the European Central Bank, which also meet next week, to raise interest rates by 50 basis points.

The European Central Bank is likely to continue its monetary tightening policy.