US GDP grew 2.8% at an annualized pace in the second quarter, well above the estimates of 2.0%. Does this new round of economic data change the trajectory for an interest rate cut from the Federal Reserve?
Verdence Capital Advisors CIO Megan Horneman joins Morning Brief to give insight into what the latest economic data means for the Fed and the broader market.
"I think anybody who expects a rate cut at the July meeting, I think that’s completely off the table. I think it even may put September in question. Let’s keep in mind, though, that we still have a lot of data to get through before we get to that September meeting, but I think it gives the Fed that flexibility to say,’ hey, you know, things are slowing, but they’re still okay.’"
Horneman explains how the status of the labor market may affect rate cuts: "I think the employment report is going to be really what decides if this is September or after September. I still think there is a likelihood you’ll get a cut at some point in the fourth quarter. Just not exactly sure at this time which which meeting it’s going to be. I do think that the economy is slowing to today’s report…The labor market, though, is not cracking as much as I think people are expecting. And so that I think is going to keep the Fed kind of on that defensive."
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