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Equities Rise With Hopes Of Lower Rates

  • Writer: Scott Poore, AIF, AWMA, APMA
    Scott Poore, AIF, AWMA, APMA
  • 18 minutes ago
  • 2 min read



Nearly all equity sectors were positive last week as geopolitical concerns eased.

Futures for September Fed Funds Rate have risen to a 73% probability of a rate cut by the end of the 3rd quarter. There appears to be dissention in the ranks as FOMC members Bowman, Waller, & Goolsbee have recently made dovish comments that it's time to begin cutting rates. Those three members, in particular, have been hawkish for quite some time. The last time a Fed Chairman "lost the room" was in 1986. It will be interesting to see how this plays out.


Meanwhile, the Fed's favorite measure of inflation, the PCE Price Index, was muted once again last month.

Friday's report showed inflation at +0.1% for May, which was in-line with expectations and the same as April. Fed Chairman Powell has repeatedly stated that he expects inflation to rise with tariffs. The U.S. continues to take in record revenues from tariffs (+$96 billion YTD) and there has been little evidence of inflation rising. The question now becomes, is there a policy mistake evident in the Fed's current stance on interest rates? It's a shorter week of trading on Wall Street this week. Barring some external event, trading volumes should be light this week.

Disclosures


The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.


Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.


Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.


Past Performance does not guarantee future results.

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