Mid-year outlook webinar: To cut or not to cut?
7月 01, 2024
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2 分鐘的閱讀時間
Portfolio Manager Jack Janasiewicz and Portfolio Strategist Garrett Melson offer their thoughts on inflation, the health of the consumer, Federal Reserve policy, and market expectations for growth and earnings.
- Inflation is trending in the right direction, with core goods and supercore services deflating slightly month over month – but shelter remains sticky.
- The September Federal Reserve meeting would be next chance for a cut, but Fed Chair Powell still wants time to see how the trends continue.
- The US consumer remains the key driver of growth, and there are signs that consumers may be trading down for cheaper priced goods.
- But there is bifurcation, and the data shows that the stress is greatest on the poorest 20% of consumers. This cohort accounts for only about 9% of consumption compared to 60% for the top 40% of earners.
- Total consumer revolving debt is at a record high, but history shows that it always trends higher over time.
- Income is higher across all earning levels and income drives consumption, so conditions are getting better, not worse.
- We expect to see softer inflation prints continue, based on disinflation still in the pipeline, and this puts a ceiling on yields.
- Growth is slowing, but from a high level, and this puts a floor on yields.
- When rate volatility compresses, it’s good for risk appetite – the sweet spot for equity markets.