- Fed minutes suggest further rate hikes, which isn’t good for the U.S., said Bleakley’s CIO.
- “In my opinion, this is a silent killer for economic growth,” said Peter Buchver.
- He added that it would be difficult for the Fed to continue with rate hikes that are due as cracks begin to form in the economy.
Historically high interest rates are a ‘silent killer’ for the economy, according to Bleeckley Financial’s chief information officer, and minutes from a recent meeting of the Federal Reserve cast hopes that policy tightening will end. It is said to have been smashed.
Policymakers expect more rate hikes, but the pace could slow, according to the minutes.
“Anyone who looked through the minutes for signs of dovishness didn’t actually find one,” Buchver said. told CNBC in an interview Wednesday.
“It looks like the Fed is going to push through at least one more time. “It’s the restrictive nature of the situation we’re in today,” he added.
The central bank has already raised interest rates by 500 basis points from near zero to more than 5% since March 2022 to curb high inflation. The efforts have had some success, with the annual rate of increase in consumer prices falling from over 9% last summer to 4% in May.
However, the impact of aggressive rate hikes is weighing on the US economy, further stressing key sectors such as banking and commercial real estate.
“In my opinion, this is a silent killer to economic growth, which is not seen by the nature of the headlines, but from a cumulative perspective, if interest rates stay at this level for an extended period of time, it will likely increase in the next few quarters and in the coming few months. It’s going to happen over the course of the year,” Buchver said.