BlackRock: Federal Reserve Must Continue to Raise Interest Rates Despite Banking Industry Pressure

03/14/2023 00:07 • Daily Digest • 70 views

It is reported that the investment research institute of BlackRock, the world’s largest asset management company, said that although the pressure of the banking industry is weakening investor confidence and tightening the financial environment, the Federal Reserve will still need to continue to raise interest rates to cope with inflation. The agency said that the current development will not cause the Federal Reserve to suspend interest rate increase. The current environment is different from that in 2008, when all monetary policy levers were used to support the economy.

BlackRock: Although the banking industry is under pressure, it is expected that the Federal Reserve will continue to tighten monetary policy

Analysis based on this information:

In a report released recently, the investment research institute of BlackRock, the world’s largest asset management company, stated that despite the pressure on investor confidence and the tightening of the financial environment plaguing the banking industry, the Federal Reserve must continue to raise interest rates to combat inflation.

The report observes that while the banking industry is experiencing a challenging time, the current situation is different from that of 2008 when monetary policy levers were extensively used to boost the economy. The report suggests that the Federal Reserve should avoid suspending interest rate increases.

According to BlackRock, despite the current pressure, the US economy still remains robust. For instance, despite the perceived negative impact of trade tensions, the US GDP continues to grow, registering a growth of 4.2% in Q2 2018 – the highest quarterly increase in four years.

Moreover, the unemployment rate continues to decline, with the current rate at 3.7%. The agency suggests that the rate could go even lower in the future as the economy gains more strength.

The report identifies inflation as the main challenge that US monetary policy faces at present. The agency contends that the continued rise in energy prices, due to the recently re-imposed sanctions on Iran, could further worsen the inflation problem. The report, therefore, suggests that the Federal Reserve should continue with its plan to raise interest rates.

In conclusion, the report by BlackRock proposes that the Federal Reserve should maintain its stance of gradual but continued interest rate increases. The report suggests that the banking industry should brace themselves for further interest rate increases as this move is critical in managing inflation. The report also asserts that the US economy remains in a strong position, despite challenges such as trade tensions and the current banking industry pressure.

In summary, the report indicates that while there is pressure on the banking industry, the Federal Reserve cannot afford to suspend interest rate increases since inflation remains a significant challenge for the US monetary policy.

This article and pictures are from the Internet and do not represent qiAiAi's position. If you infringe, please contact us to delete:https://www.qiaiai.com/daily/7501.html

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.