Morgan Stanley CEO says era of zero interest rates and inflation ‘is over’ | Wilnesh News

RIYADH – The days of easy money and zero interest rates are a thing of the past, Morgan Stanley Chief Executive Ted Peake told a group of financial executives in Riyadh on Tuesday.

“The end of financial repression, zero interest rates, zero inflation, that era is over. Interest rates will be higher and will be challenged around the world. And the end of ‘the end of history’ – geopolitics is back and will be The end of history. With the end of history, conflicts between nations and ideologies have become a thing of the past.

Suppressed interest rates and easy monetary policy have been in the rearview mirror since 2022, when the Fed moved its benchmark to 18 years after cutting interest rates to near zero in response to the Covid-19 pandemic. Rates have increased by about 500 basis points in a few months.

“We had the stimulus of COVID-19 and zero interest rates so small companies could go public without much of a business plan, and then we had about 18 months of tough fear, almost 18 months of fear,” Peake said of that period. Nothing happens.

“It feels like the pace is more normalized now. It’s more difficult being a public company,” he said during a panel discussion moderated by CNBC’s Sara Eisen of Saudi Arabia’s Future Investment Initiative.

The Federal Reserve cut its benchmark interest rate by 50 basis points in September, its first rate cut since March 2020, marking a turning point in its management of the U.S. economy and inflation outlook.

In a late-September report, strategists JPMorgan Chase and Fitch Ratings Two more rate cuts are expected by the end of 2024, with such cuts expected to continue into 2025.

Several Wall Street CEOs seemed to disagree, citing persistent inflation expectations.

At an FII panel meeting earlier on Tuesday, guests including the CEOs of Goldman Sachs, Carlyle, Morgan Stanley, Standard Chartered and State Street were asked to show their hands if they thought the Fed would implement two more policies this year. interest rate cut. Not a single group member raised their hand.