The chief economist of Apollo Global Management stated that the Federal Reserve is unlikely to cut interest rates this year, as a looser financial environment will offset the impact of borrowing costs by maintaining inflation stickiness and economic resilience.

In December, the Federal Reserve announced an end to the historic two-year tightening monetary policies in the US and stated that borrowing costs will be lowered, which triggered a rebound in capital market activity and lifted the economy and inflation.

Thorstern Slok stated at a webinar on Thursday, June 20th that "We do believe, at least for the next few quarters, that the looser financial environment remains more robust."

Apollo is a global alternative asset management company with $671 billion of assets under management as of March.

Since sending signals in December last year, Federal Reserve officials have adjusted their predictions for the extent of interest rate cuts this year from three to one. As of Thursday, traders expected interest rate cuts to be about 25 basis points twice this year, after data showed economic slowdown and increased price pressures in recent weeks.

However, Slok said that high interest rates take time to cool the economy and inflation, as higher borrowing costs have not yet hit many US consumers and businesses who have instead benefited from a buoyant stock market and higher returns on fixed income products.

"We just haven't seen the transmission of monetary policy as quickly as many people, including the Fed, had anticipated...in 2023."

"Of course, there are good reasons to expect inflation to fall...but we haven't fully achieved that goal yet, unfortunately, inflation is still too high."