Muhannad Al-Amaa, chief executive officer of Beam Capital, said the rally in US stock markets stems from optimism that recent economic data on slowing inflation and other positive indicators in the US could continue.
Al-Amaa added in an interview with Al-Arabiya that Federal Reserve members tried to downplay the importance of this data, when they said they would not be swayed by a positive statement or two, in as there must be more sharp and continued declines in inflation for the Fed to change its policies.
He explained that markets and investors are optimistic that we may have learned of the higher tier US benefits will reach.
The Blinds predicted that the Fed would not raise interest rates more than 5% next year.
At the same time, the blinds warned investors not to be overly optimistic, because it’s unclear how long interest rates will stay high.
He said that the time period related to the level of interest increases is related to inflation on the one hand and the level of performance of the economy in general on the other.
He believes there is investor pessimism that the US economy will slow down very rapidly next year and lead the Federal Reserve to cut interest rates in 2023, and this scenario is followed by many investors.
He explained that another scenario is likely, according to current data, that the US economy is “strong” and will remain strong for longer than expected, and therefore the benefits could linger longer than expected, adding, “If we look at unemployment levels are at a low level, as well as GDP expectations are still good and do not indicate a recession.
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