This week is full of key inflation data in the form of the Consumer Price Index (CPI) and Producer Price Index (PPI) as well as jobless claims, a slew of earnings from major financial institutions, and minutes from the March FOMC meeting will be released. All of this data may influence how the Federal Reserve makes its next monetary policy decision, giving cause for investors to watch closely, wondering if it will impact the stock market (^DJI, ^IXIC, ^GSPC).
Senior US Equity Strategist at BofA Securities Ohsung Kwon joins The Morning Brief to give insight into all of this data and the potential effect it may have on the Fed’s outlook on interest rates.
In terms of policy decisions from the Fed, however, Kwon argues it may not matter how they react: "At the end of the day it’s really earnings. If the Fed can cut less because the economy is still strong, and, as a bull, I would rather much see the Fed cutting less because the economy is very strong than the Fed having to cut because the economy is weakening. And I don’t think it’s really about when the Fed starts cutting, I think it’s really about how. Whether it’s proactive first cut or reactive first cut, If it’s a proactive first cut meaning the Fed starts cutting for insurance reasons, that’s obviously bullish for equities. But if it’s a reactionary first cut the Fed having to cut due to weakening data, that’s bearish."
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