On Thursday (14th) Morgan Stanley (Moscow) CEO James Gorman called on the Fed to raise interest rates in an interview with Bloomberg.
The minutes of the September meeting recently announced by the Fed showed that participants pointed out that if the next (November) interest rate meeting decides to reduce the purchase of debt (Taper), it may start Taper from mid-November or mid-December. It may end later or so, but how quickly should the interest rate rise to cope with the problem? Fed officials still have differences.
The FedWatch tool of the Chicago Mercantile Exchange (CME) shows that investors in federal funds futures predict that the Fed has a nearly 65% chance of raising interest rates for the first time in September 2022.
JPMorgan Chase, BlackRock, and Goldman Sachs all expressed their concerns about the inflation situation and believed that the soaring inflation was not temporary. Morgan Stanley CEO Goldman also expressed the same view on Thursday.
Goldman mentioned in an interview on Thursday that Morgan Stanley is preparing for the Federal Reserve to raise interest rates, and the market is ready to raise interest rates.He said: “(Fed) has to burst this bubble a little bit. There is too much money in the market.”
As wages rise, supply chain bottlenecks and soaring commodity prices have pushed up inflation. He said: “Not all of these are temporary phenomena. This will force the Fed to take more aggressive measures. The market has digested that the Fed will have to take action, not only to reduce debt purchases, but also to raise interest rates.”
When should the Fed take action? Goldman said: “If it’s me, it will definitely start in the first quarter of next year. They have great ability to act. Raising interest rates in the next year will not be a disaster, nor will it be surprising.”
Morgan Stanley announced the third quarter of 2021 financial report on Thursday, with revenue of US$14.8 billion, an annual increase of 26%, and net profit per share (EPS) of US$1.98, which were better than Wall Street expectations, mainly due to corporate mergers and IPO activities. More consulting income.
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