Leaders of the biggest U.S. banks don’t see 2018’s wild ending as reason enough for the Federal Reserve to reverse course.
“Some people in the market are predicting a rate cut this year, but I don’t see that happening,” Morgan Stanley Chief Executive Officer James Gorman said in a Bloomberg Television interview in Davos, Switzerland. “But I certainly don’t see three or four increases. My personal projection is it will be one or two.”
The year ended chaotically for markets after a 2018 that saw the Fed increase rates four times, and many investors have scaled back their expectations for hikes in 2019 amid signs of slowing global growth. Lending margins have benefited from higher interest rates, but fears abound that tightening too quickly may strangle expansion.
“Right now, the data in December’s strong enough for another rate rise,” Bank of America Corp.’s CEO Brian Moynihan told Bloomberg Television on Wednesday.
Political factors like Brexit and the government shutdown in the U.S. have increased the uncertainty.
“The Fed will look at what’s going on, and my guess is they will probably pause now,” JPMorgan Chase & Co. CEO Jamie Dimon told CNBC in an interview Wednesday. “But if they raise rates again in six months because we’re growing at 2.5%, that’s still a good thing.”
