The Federal Reserve has left interest rates unchanged in June as inflation continues to cool. BMO Family Office Chief Investment Officer Carol Schleif joins Catalysts to discuss how Wall Street is reacting to the decision and how investors should be best positioned in the current economy.
Schleif believes that the markets (^DJI, ^IXIC, ^GSPC) are "too hyper-focused" on the Fed, stating: "If you step back and zoom out from it, the Fed has much less control over even the short-term economy and short-term rates because a lot less of the lending goes through the formal banking system. We’ve got a lot of alternatives to credit now. We’ve got a lot of alternatives to financing now."
She believes that looking at demographics and other quantitative data is much more important and can be rather difficult to do when all eyes are on the Fed.
She adds that investors who are long-term believers in the markets "can keep a foot forward into the risk and growth opportunities." She says that these investors can keep a portion of their portfolios as long as they’re comfortable with day-to-day volatility. Schleif is overweight on US securities and believes that the tech upgrade cycle will be a significant market driver.
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