Blackrock expects US Fed to deliver a rate cut next week – CNBC TV18

Ben Powell, Chief Middle East & APAC Investment Strategist at the Blackrock Investment Institute believes that the US Federal Reserve doesn’t like to let the market down. “So, if the market is fully expecting a cut next week and if the Fed doesn’t deliver, that would be a shock. Therefore, the Fed will follow through,” he said.

The next Fed meeting is scheduled for December 17 and 18.

He sees inflation battle continuing through 2025. It continues to be sticky, and Blackrock Investment Institute believes it is driven by structural forces, and will give the Fed relatively little room to maneuver.

“So next week they are going to cut, but in 2025 probably they can only do maybe two more cuts to get down to 4% and then we think they are going to be stuck because inflation continues to be a bit of a problem, more than they would prefer,” he said.

Also Read | Asian stocks drop ahead of next week’s US Fed meeting

BlackRock, in its 2025 global outlook, has raised its US overweight from plus one to plus two. Deregulation and the AI boom will keep driving US equities upward. So 2025 should continue to be more of a good news for holders of US equities, he said.

Powell believes that the markets are skeptical of Chinese policymakers and want action, not promises. While households have savings, anxiety keeps spending low. The challenge for 2025 is to rebuild confidence, which could boost the economy, but it won’t be easy.

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