BlackRock Warns of Overestimated Fed Rate Cuts Amid Inflation Concerns

According to BlockBeats, BlackRock has issued a report cautioning that market expectations for multiple interest rate cuts by the Federal Reserve are overly optimistic, overlooking the risks of rising inflation. The report suggests that the market is pricing in four to five rate cuts by the Federal Reserve this year, each by 25 basis points. BlackRock anticipates that upcoming tariffs will drive inflation higher, resulting in global borrowing costs exceeding pre-pandemic levels. The firm believes that the planned new wave of U.S. tariffs and the responses from other countries reinforce the notion that interest rates and long-term bond yields will remain above pre-pandemic levels. Additionally, tariffs in certain regions and loose fiscal policies worldwide could contribute to increased inflation.