Latest News

‘Prick This Bubble’: Morgan Stanley CEO Calls for Fed Rate Hikes

Economy1 hour ago (Oct 14, 2021 16:44)

© Bloomberg. James Gorman Photographer: Giulia Marchi/Bloomberg


(Bloomberg) — Morgan Stanley (NYSE:MS) Chief Executive Officer James Gorman is girding for rate hikes, and he says markets are ready for them.

“You’ve got to prick this bubble a little bit,” Gorman said Thursday in an interview with Bloomberg Television. “Money is a bit too free and available right now.”

Gorman pointed to wage increases, supply-chain bottlenecks and surging commodity prices driving inflation higher. Not all of that is a temporary phenomenon, forcing the Federal Reserve to move a little more aggressively than policy makers are predicting right now, according to Gorman.

His comments echo concerns voiced Wednesday by Goldman Sachs Group Inc (NYSE:GS). President John Waldron, who also said inflation is not transitory. BlackRock Inc (NYSE:BLK). CEO Larry Fink said in an interview with CNBC that inflation is “definitely not transitory,” and Jamie Dimon, who heads JPMorgan Chase & Co. (NYSE:JPM), said inflation probably won’t ease in the next few quarters.

So when should the Fed act? “Certainly by the first quarter of next year I’d start moving,” Gorman said. “They have got a lot of capacity to move.” Bringing interest rates higher over the next year isn’t a crisis nor unexpected, he said.

Indications of tightening monetary policy are typically met with a drop in asset prices. But the Morgan Stanley chief said that shouldn’t be a cause for concern this time around.

“I think the market has digested that the Fed will have to move, not just on tapering, but rate increases,” he said. “And by the way, we are 10 rate increases away from what would be considered normal.”

©2021 Bloomberg L.P.

‘Prick This Bubble’: Morgan Stanley CEO Calls for Fed Rate Hikes

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

MARKET WRAP: FTSE rallies, GBP hits two-week high, Bitcoin jumps

Previous article

BoE’s Mann says she can wait before raising rates

Next article

You may also like


Leave a reply

Your email address will not be published.

More in Latest News