The Federal Reserve will conclude its two-day policy meeting on July 31 with a potential decision on interest rate cuts. While most on Wall Street believe central bank policy will remain unchanged in July, many are betting on a first cut coming in September.
Newton Investment Management global bond portfolio manager Jonathan Day joins Catalysts to give insight into Treasury yields, potential movements from the Fed, and the broader market.
Day argues that the Fed will cut interest rates but will remain cautious as it does so: "If you roll back to December last year, we were in a very familiar situation, six rate cuts priced in, and I think the Fed will be very, very cautious about kind of playing up to the market expectations of that because, again, what happened in January and February of this year, whereas those rate cuts got priced in, the economy started turning around, got that inflation spike in Q1 as well, so the market does react to rate rate cut expectations and where expectations where rates will be in 12 to 18 months time. So, for me, the Fed will still remain quite cautious."
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