The market’s forecast for the US’ final key interest rate fell by about 0.5 percentage point (p) in the past month.
The market is expected to remain frozen until the last hike in May.
The New York office of the Bank of Korea announced on the 12th that, as a result of its own survey of 12 local investment banks (IBs) on the 7th, two-thirds of them, or eight, predicted the final level of the US interest rate at 5.00 to 5.25%.
In the survey on the 10th of last month, a month ago, only 3 out of 12 predicted 5.00 to 5.25%, and this is an increase of 5 places.
On the other hand, investment banks that responded 5.50 to 5.75 percent reached 7, more than half of last month, but dropped sharply to 1 this month.
A bank that believed that the Federal Reserve System (Fed), the central bank of the United States, would freeze its key interest rate this month, also opened one new bank in a month.
As in last month, the other two predicted the next two base rate hikes (final rate 5.25-5.50%).
The reason why the forecasts of investment banks were all lowered was because of the banking crisis that spread after the bankruptcy of Silicon Valley Bank (SVB) in the United States.
The New York office said, “It is evaluated that the banking crisis has been calmed down by the prompt response of the policy authorities, but the financial market pays attention to the movement of the real economy and the subsequent change in the US monetary policy as the possibility of a slowdown in the economy may increase due to reduction in lending by banks.” I am doing it,” he said.
In fact, Goldman Sachs cut its economic growth rate for the fourth quarter from 1.5% to 1.2% annually, and Morgan Stanley cut its annual growth rate from 1.1% to 1.0%, respectively, in consideration of credit contraction following the banking crisis.
The New York office said, “The Fed is expected to maintain a tight monetary stance for the time being in order to stabilize inflation at the inflation target level.” will” he foresaw.
Last month, the US employment index showed an increase of 236,000 non-farm payrolls, which slightly exceeded expectations, saying, “Investment banks generally maintained their expectations of a rate hike by the Federal Reserve in May.” As concerns about sluggishness were dispelled, it rose somewhat.”
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.