Cookie Settings
Picture
Contact
Picture

Fed close to peak. Cuts in 2023 still ruled out despite credit squeeze

In Short

The expected fallout from the banking sector led the Fed a with respect to the bold statements made until two weeks ago, but should not be disruptive enough- accordogn to the FOMC – to trigger rate cuts this year. The Fed expect a significant squeeze in credit standards which will work though the economy much like an interest rate increase.

Highlights:

  • The FOMC members voted unanimously for another 25bps rate rise. The press release acknowledged the impact of the banking turmoil but reaffirmed the commitment to fighting inflation, whose projected path has not changed much since the Dec. meeting.
  • The dots imply only another hike, a U-turn from the hawkish rhetoric that preceded the banking turmoil, but the FOMC still rules out cuts this year. For 2024 a flatter path of easing is foreseen compared with December. The FOMS stil sees a path for soft landing. We are less optimistic and pencil in rate cuts already in Q4.
  • Chair Powell wanted to reassure on the state of the banking sector, but conceded that it is too early to estimate the impact of the coming credit tightening on the economy. Both an internal and an independent review will be carried out to address the supervisory flaws.

    Download the publication below:
Fed close to peak. Cuts in 2023 still ruled out despite credit squeeze
PDF
Investment Capabilities
Funds
Responsible Investing
Insights

The latest views, research and investment insights from the experts of our ecosystem



About Us
Picture

© Generali Investments, all rights reserved. This website is provided by Generali Investments and is considered as a marketing communication and financial promotion related to the products and services of the following companies belonging to the Generali group: Generali Investments Partners S.p.A. Società di gestione del risparmio, Generali Insurance Asset Management S.p.A. Società di gestione del risparmio, Generali Investments Luxembourg S.A. and Generali Investments Holding S.p.A. (hereinafter jointly, Generali Investments). Moreover, the website may contain marketing communication and financial promotion of products and services of companies part of the multi-boutique platform coordinated by Generali Investments Partners S.p.A. Società di gestione del risparmio, and in particular of Infranity, Sycomore Asset Management, Aperture Investors LLC., Plenisfer Investments SGR, Lumyna Investments, Sosteneo Infrastructure Partners SGR, Axis Retail Partners S.p.A. and Generali Real Estate S.p.A. Società di Gestione del Risparmio

Legal Information
Cookies Policy
Privacy Policy
Terms and Conditions
Copyright
Glossary