At the Saudi Arabia Future Investment Initiative conference on Tuesday, global financial giants hinted that market expectations for the Federal Reserve's interest rate cuts may be overly optimistic.

So far this year, the Federal Reserve has only cut interest rates once in September, by 50 basis points. The Federal Reserve will hold two interest rate resolutions this year, on November 7th and December 18th.

When asked if they believed the Federal Reserve would cut interest rates twice again this year, no one raised their hand in the group discussion involving executives from Goldman Sachs, Morgan Stanley, Standard Chartered, Carlyle, Apollo Global Management, and State Street. Most people believe that the Federal Reserve may cut interest rates again by the end of 2024.

BlackRock CEO Larry Fink stated on the forum that he expects the Federal Reserve to cut interest rates by at least 25 basis points this year.

Morgan Stanley CEO Ted Pick stated that the days of loose monetary policy and zero interest rates are now a thing of the past. Interest rates will be higher and will be challenged globally. Geopolitics has returned and will become a part of the challenges for the next few decades.

Since 2022, suppressed interest rates and loose monetary policy have been in the rearview mirror. At that time, the Federal Reserve raised its benchmark interest rate by about 500 basis points over an 18 month period after cutting interest rates to near zero in response to the pandemic.

Pick talked about the challenges faced by listed companies during that period. He said, "We experienced the stimulus of the pandemic and zero interest rates, so small companies could go public without much business plan, and then we went through about 18 months of difficult fear with almost nothing happening

The Federal Reserve lowered its benchmark interest rate by 50 basis points in September, marking the first rate cut since March 2020 and a turning point in its management of the US economy and inflation outlook.

In a report in late September, strategists from JPMorgan and Fitch Ratings predicted that the United States would make two more interest rate cuts by the end of 2024, and expected such cuts to continue until 2025.

Several CEOs on Wall Street seem to disagree with this view, citing persistent inflation expectations.

At the FII group meeting held earlier on Tuesday, guests including the CEOs of Goldman Sachs, Carlyle, Morgan Stanley, Standard Chartered Bank, and State Street Bank were asked to raise their hands if they believed the Federal Reserve would implement two more interest rate cuts this year. As a result, no group member raised their hand.