Will There Be an Interest Rate Cut in 2024? | Abdulmohsin Al Omran in an Interview with Al Arabiya

In a recent interview with Al Arabiya, Abdulmohsin Al Omran, Founder and CEO of The Family Office, discussed his expectations of interest rate cuts in 2024 and warned of a potential credit crunch. He advised against using leverage and investing in structured products. Below are the highlights of the interview:

Dec 24, 2023|Management Insights- 1 min

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  • The Federal Reserve (the “Fed”) is expected to begin reducing interest rates in May 2024, once two main targets are met:

- Unemployment rate below 5%, which is already achieved.

- Inflation decline to 2%, which is yet to be achieved.

  • The pace of interest rate cuts depends on the extent of economic slowdown. Despite previous expectations of interest rate cuts, we expect a credit crunch next year, so investors should avoid significant borrowing.

  • Investing in the US differs from other countries due to its broad market, flexibility, significant opportunities, and legal systems. For long-term investment opportunities, China is considered a good market given the excellent opportunities available, such as real estate. Patience is however required for such investments.

  • Last year, we warned against investing in bonds and using leverage, and now we also warn against investing in structured products.

  • The expected liquidity crisis and widening credit spreads may affect bond prices. Therefore, investors must be cautious and concentrate their portfolios in private market investments.

  • At The Family Office, we do not favor investing in cryptocurrency because it is challenging for investors to achieve good returns compared to the high risks involved. Our goal is to preserve wealth rather than take unnecessary risks.


Watch the full interview above.

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