Macro views

Labor market equilibrium and the Fed rate-cut cycle

September 13, 2024 - 2 min read

Portfolio Manager and Lead Portfolio Strategist – Natixis Investment Managers Solutions

Brian Hess

VP, Investment Strategist – Natixis Investment Managers

Jack Janasiewicz and Brian Hess discuss the latest developments in the labor market, inflation, and positioning in the Natixis model portfolios.

Key takeaways

The labor markets are approaching an equilibrium. While hiring is slowing, there hasn’t been an uptick in layoff and discharge rates.
We’re experiencing a bifurcated economy. Consumer spending remains strong among higher income cohorts who drive consumption and are benefiting from the stock market rally, while those with lower incomes are getting squeezed from inflation’s impact on food and shelter.
As inflation falls closer to the Fed’s goal of 2%, the stage is set for the rate-cut cycle to commence.
The Natixis model portfolios have a small overweight with US equity versus international. The growth backdrop favors US margin expansion.

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Investing involves risk, including the risk of loss. The views and opinions are as of September 10, 2024, and may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third-party sources, it does not guarantee the accuracy, adequacy or completeness of such information.

Natixis Advisors, LLC provides advisory services through its division Natixis Investment Managers Solutions. Advisory services are generally provided with the assistance of model portfolio providers, some of which are affiliates of Natixis Investment Managers, LLC.

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