The Federal Reserve may not need to continue its efforts to fight inflation by raising interest rates, according to BlackRock, the world's largest asset manager. In a report released on Monday, Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, stated that recent turmoil in the banking sector, coupled with slowing wage gains and jobs growth, point to a slowdown in the US economy. Rieder added that the Federal Reserve may not require further rate hikes after a potential one in May, and there may even be a case for the central bank to hold off on any increases altogether. Rieder cited recent data showing labour market weakness and the failure of two US banks as indicators of a slowing economy. He believes that inflation will ease in line with this slowdown. The Federal Reserve has previously embarked on an aggressive rate-hiking cycle to combat inflation, but traders are currently taking a more dovish view and betting that policymakers will cut rates later in the year. An inflation report scheduled for release on Wednesday will be closely watched by investors to gauge the near-term trajectory for interest rates.
