The Federal Reserve has made it clear that a banking sector crisis will not force its hand on interest rate cuts in 2023, according to BlackRock analysts.
Market pricing indicates that central bankers will approve another quarter-percentage point rate hike at their May meeting, according to the CME Group's FedWatch Group. But traders expect the Fed to pivot and start reducing the federal funds rate as soon as July, eventually trimming as much as a full percentage point by the end of the year.
Federal Reserve Chair Jerome Powell arrives for testimony before the Senate Banking Committee March 7, 2023, in Washington, D.C.BlackRock – which manages about $10 trillion in assets – said there are still signs of price pressures within the economy, noting that inflation is "still not on track" to settle at the Fed's 2% target.
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