There is a growing sentiment among investors that the Federal Reserve could soon put an end to its policy of aggressive interest rate hikes. But Larry Fink, CEO of investment giant BlackRock, thinks that Fed is not done yet.
During a recent appearance on The Claman Countdown business show, Fink predicted that several more interest hikes are coming.
“I think we’re going to have two to three more rate increases,” said Fink.
According to Fink, the US economy needs higher rates in order to cool down the inflation to the Fed’s prediction of 4%.
“The reason why is I believe interest rates need to go higher, especially in the short end, because we have stickier inflation,” he added.
The Fed increased its rates by a quarter percentage point back in March, which brought their policy benchmark in the range of 4.75% to 5%. According to analysts, another hike is expected at the next Fed meeting in May, which could be followed by rate cuts by the end of the year.
However, the Fed’s interest rate policy seems like it could go either way, considering that there is a divide among the Federal Reserve officials. According to a recent report by Bloomberg, while one group of officials is insisting on the continuation of an aggressive policy, some officials are preaching a more moderate and patient approach.