The latest inflation report should provide some comfort for consumers and investors alike.
While investors rotated out of megacap tech stocks, the question remains: when will the Fed start cutting rates?
Ronald Temple, chief markets strategist at Lazard, said, “I think July should be a consideration but let’s be honest it’s not going to happen. If you look at markets they’re pricing in a 95% chance of a September rate cut, up from 70% yesterday.
“The bigger call is do they cut it at each meeting until year end? And I think they do. The market is saying 60 basis points of rate cuts by year-end, I think we get 75.”
“If I’m right that this is because of disinflation and a softening of strong growth, and not weak growth, then the case may be that the Fed would cut rates to 3.5%-4% over the easing cycle. But that’s it. I don’t think people in the market should be pinning their hats on a 2.5% Fed funds rate. If I’m right, the 10-year Treasury yield should not go down from here; in fact, it should be a bit higher.”
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Some famous words of Buffett. I hope it's useful to you. : )
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