The FOMC is set for their 2-day meeting on Tuesday, with most on Wall Street believing that it will not result in an interest rate cut, pricing in the first one in September. But what should investors look out for to be sure?
Liz Young Thomas SoFi head of investment strategy joins Market Domination to give insight into the Fed’s potential decisions over interest rates and the data she is keeping an eye on.
In terms of what could be driving interest rate cuts, Thomas says, in addition to the jobs and inflation reports, investors should be watching for data on the consumer. "What you really want to watch is the results from consumer discretionary, but also consumer staples companies. How is their revenue doing? How is the activity in the stores doing big box retailers? Those are going to be good tells," she says.
Young Thomas believes firmly that the first cut will most likely take place in September: "I still think September is the first cut. There is chatter now about September being possibly a 50 basis point cut. I still view that as a very contrarian view, but we have a lot of data that we’re going to get between now and that September 18th meeting. So we’ve obviously have jobs coming this Friday. I think that’s a very important number. And then in August we have more CPI data, we have more PCE data, we have more jobs data. So we’re going to get a decent amount of data before they have to make that rate cut decision."
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