Carlyle CEO expects Fed to cut interest rates three times this year, followed by a pause

(Bloomberg) — Harvey Schwartz, chief executive of the Carlyle Group Inc., expects the U.S. Federal Reserve to cut interest rates three times by the end of the year and then pause to assess the impact.

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The private equity firm still sees signs of a “vibrant economy,” Schwartz, who took over as CEO at Carlyle last year, said in a CNBC interview on Wednesday. Monetary policy has helped cool inflation, and after expected cuts in 2024, the central bank may only need one more cut next year, he said.

“The Federal Reserve has done an amazing job under complex circumstances,” Schwartz said.

Traders and negotiators are awaiting what is likely to be the Fed's first rate cut in four years on Wednesday. The market is expecting a quarter-percentage point cut, with the chance of a larger cut seen as a hit or miss.

Deal activity has started to improve and, barring unexpected market disruptions, should continue to rise, Schwartz said. The amount of capital Carlyle deployed and realized increased in the first half of the year, although both metrics are still far from their peaks.

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