Fed on Hold, May Cut Rates Next Year: BlackRock's Watson

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Bloomberg 09/18 22:46 · 5621 Views

Marilyn Watson, BlackRock's head of global fundamental fixed income strategy, says she expects to remain on hold for the remainder of 2023 during an interview with Matt Miller on "Bloomberg The Open."

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  • 00:00 Maryily what do you expect from the do plot and from November I mean this market has been overly optimistic throughout this fder rate hike cycle.
  • 00:08 Yes so in terms of the dotlo as you know the moment is essentially showing sort of five percent five point six percent yearend this year down four point six percent end of next year I think we'LL be focusing on we expect them to remain pretty much the same for this year given that why we think will'LL be UN holdd the you know they asked very very data dependent the question is I think more whether we could see an adjustment to that but more I think it's again.
  • 00:38 Next year what could we see whether we expect to see and whether the you know the voting members expect to see rates higher for longer um and as you know we do expect the moment they're showing a cut of one percent in total next year but from where they currently think will end this year but um we could see you know next year and also further actions twenty page five as well if they expect rates To Be higher for longer than I think I think that will have an impact what what happened happened over a one percent cut maryily what happened.
  • 01:08 Happened for four cuts next year.
  • 01:12 So in the moment the economic data I think is consistently surprised to theli um both for you know to the f MC as well as for many market of as as well um and I think what we would need to see for them to change or what theyre expecting next year is to see if they were to you know maybe reduce their forecast further for next year in terms of interest rates we would probably have to see more deterioration in terms of economic activity the us economic out.
  • 01:42 Look also in terms of inflation it has been moderating is coming down but it's still above the target and so but I think really what we need to see is a deterioration really an economic activity in GDP in the unemployment rate in the lab market and at the moment you know we're just not really seeing that in the terms of the data.