Morgan Stanley CEO Ted Pick discussed the end of easy money and zero interest rates during a panel of finance CEOs in Riyadh. He mentioned that the era of financial repression is over, and interest rates will be higher and challenged worldwide. Pick also referred to the return of geopolitics as a challenge for the future, departing from the idea of the “end of history” as proposed by Francis Fukuyama.
The Federal Reserve has started to raise its benchmark rate after slashing rates to near zero in response to the Covid-19 pandemic. Pick highlighted the challenges faced by publicly-listed companies during this period of transition. Despite market expectations of continued inflation, the Fed recently cut its benchmark rate for the first time since 2020.
While some reports predict further interest rate cuts by the end of 2024, several Wall Street CEOs at the Future Investment Initiative in Saudi Arabia indicated their disbelief by not raising their hands when asked about the possibility of more rate cuts this year. The CEOs of companies like Goldman Sachs, Carlyle, and Standard Chartered expressed skepticism about further cuts and indicated a more normalized economic environment moving forward.
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