Home Business The latest FMS report expects the Fed to raise interest rates by only 1.5 yards next year, slower than market expectations by 2-3 yards | Anue Juheng-US Stocks

The latest FMS report expects the Fed to raise interest rates by only 1.5 yards next year, slower than market expectations by 2-3 yards | Anue Juheng-US Stocks

by news dir

According to Bank of America Merrill Lynch’s November Global Fund Manager Survey (FMS), managers generally expect the Fed to raise interest rates by only 1.5 yards in 2022, which is not small compared to the current mainstream market expectations of 2-3 yards. In and out.

If interest rates can maintain a gradual low-level rise, of course, the strength of support for the valuation of US stocks will be even more significant.

Picture: BofA

The Federal Reserve may raise interest rates at a slower rate than market expectations, and investment bank Morgan Stanley also holds the same view.

As inflation heats up, the market generally expects that the Fed will be forced to speed up and raise interest rates ahead of schedule next year. However, Morgan Stanley believes that the Fed will delay the first quarter of 2023 before raising interest rates for the first time.

Morgan Stanley economist Andrew Sheets put forward two main factors that will drive no interest rate hikes next year, including a decline in core PCE inflation expectations and an increase in the labor force participation rate. He believes that the market may see more support for these expectations in March next year and June next year at the latest.

Especially in the part of inflation, Sheets believes that inflation in developed countries will reach its peak in the next few months. Then, as the supply chain normalizes and the rise in commodity prices slows down, it will decline throughout 2022. There must be a dovish capital.


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