The founder and CEO of The Family Office, Abdul Mohsen Al-Omran, said that the markets were overly optimistic, noting that the inflation rate had not yet been corrected.
Al-Omran added, in an interview with Al-Arabiya, that the Federal Reserve is looking for two goals, the first is to reduce the unemployment rate, and this goal is achieved.
He explained that the target of reducing inflation by 2% is still far away, noting that the Fed started late in considering correcting this path.
He said that the Fed was optimistic at the last meeting, explaining that the next meeting may witness a different outlook and may raise interest rates by 0.5%, but if they are raised by 0.25%, there may be another hike by the same rate.
He pointed out that the inflation of goods, services and wages in the United States continues to be at higher levels than the targets of the US Federal Reserve.
He stressed that these high levels will lead to keeping interest rates high for a longer period, and therefore this will have a negative impact on the companies’ performance in the future.
He expected the Fed not to cut interest rates before the first quarter of 2024, according to current data.
He continued, “With the increase in wages, the liquidity of consumers rises, and thus spending takes place, and this is what the United States is going through in terms of a strong economy,” expecting that the US economy will begin to slow down from the third or fourth quarter of this year.
He said that the impact of interest rates takes approximately 9 months from the beginning of their increase for companies and consumers to be affected.
He pointed out that the rate of default among “credit card” users began to rise, explaining that “when such things begin to appear, it is the beginning of a slowdown in the economy.”