French Bank "US Final Interest Rate Reached in First Half... Global Economy Possible Soft Landing"

France's Cr?dit Agricole Bank has analyzed that the U.S. policy interest rate (base rate) has reached its final rate in the first half of this year and will be maintained until the end of the year.

Xiao Jia Zi, Head of the Asia Research Center at Cr?dit Agricole Bank, presented a forecast for the end of the policy rate hike cycle at the 'FSS SPEAKS 2023' held on the 13th at the Federation of Korean Industries Conference Center in Seoul, diagnosing that "the possibility of a global economic soft landing is increasing."

He predicted, "The reopening of China's economic activities will drive the global economy this year and contribute to the improvement of South Korea's international balance of payments and the stabilization of supply chains." However, he analyzed that recent instability in the banking sector, such as the Silicon Valley Bank (SVB) incident, is limited to the respective banks, and Asian banks have better resilience compared to U.S. and European banks.

The U.S. Federal Reserve (Fed) will decide the direction of interest rates at the Federal Open Market Committee (FOMC) meeting on the 3rd of next month. According to the minutes recently released by the Fed, some participants argued that it might be appropriate to temporarily pause rate hikes until the full impact of the banking crisis on the economy is understood. However, those advocating for rate hikes countered that additional monetary policy is appropriate to bring inflation down to the 2% range.

According to the minutes, the majority of the 18 meeting participants agreed that one more rate hike is almost certain within this year, and that the current rate level will be maintained as long as the labor market remains stable.

Meanwhile, on the same day, Germany's Deutsche Bank gave a presentation on global financial companies' response strategies. Sandra Malika, Chief Operating Officer (COO) for the Asia-Pacific region, mentioned macroeconomic changes, the climate crisis, and rapid technological advancements, presenting strategic directions in response. She stated, "We will expand funding functions such as supplying own funds and intermediating financing through capital markets, while strengthening momentum through sustainability-focused governance."

This content was produced with the assistance of AI translation services.