A Compilation of The Big Banks’ Views

<WikiFX Malaysia Original – Editor: Fion>

• Fitch Ratings projects that the impact of global stagflation scenarios on rated portfolios is most pronounced in sectors where market volatility has increased.

• Deutsche Bank expects the Fed target rate to be 5%-6% and the U.S. economy to fall into a deep recession while energy and agricultural-related commodities could remain high throughout the year. Deutsche Bank economists warned that the Federal Reserve may need to implement the most aggressive monetary tightening since the 1980s to bring inflation down from a four-decade high, but that could lead to a severe recession in the United States next year.

• Goldman Sachs economists reportedly claimed that the European Central Bank (ECB) is expected to raise interest rates by 25 basis points in July and once each in September and December. By next year, the ECB could raise rates 4 more times, bringing the key rate to 1.25%. Goldman Sachs is also waiting for the final decision of the ECB on whether to end its asset purchase program by the end of the second quarter. While a sharp slowdown in economic growth and renewed sovereign debt pressures could lead to a slowdown in the policy normalization process, a faster exit from easing would be needed if inflation expectations are higher and more severe inflationary impacts start emerging.

  

• The World Bank reported on April 26 that Sri Lanka's poverty rate will rise further in 2022 as the country's economic situation worsens. Sri Lanka's poverty rate could hit 11.7% in 2022, compared to 10% in 2019.

• Citigroup CEO asserts that the U.S economic growth would be unlikely to be affected by inflation as consumer savings will offset its impact.

• Citibank suggests that the U.S. dollar could remain bullish at least until the FOMC meeting on the 4th of May. In the past few weeks, the rise in U.S. bond yields, the dollar's strength, and the stock market downturn had been the focus of market attention, and these three key factors shall stay in the spotlight (at least) until then.

<WikiFX Malaysia Original – Editor: Fion>