Fed may not be able to cut rates this year, adviser says [Video]

Fed may not be able to cut rates this year, adviser says

Stocks (^GSPC, ^IXIC, ^DJI) are rallying ahead of the highly anticipated Federal Open Market Committee (FOMC) meeting, which will determine the Federal Reserve’s decision on potential rate cuts. J.P. Morgan Asset Management Global Market Strategist Jordan Jackson joins Catalysts to discuss the outlook for rate cuts.
Jackson acknowledges “there’s real risk” that a Federal Reserve rate cut might not materialize in 2024 at all. He points to dynamics such as persistently high core inflation and a tight labor market, suggesting that the Fed is “not in the position to cut rates.” Additionally, Jackson notes that historically, the Fed cutting rates during an election year has often led to a recession, stating, “At best, they may be able to squeeze a cut in in December.”
If a rate cut does not occur in 2024, Jackson predicts that markets could see three to four rate cuts in 2025 instead. Asked how markets would react to a higher-for-longer environment if rate cuts did not materialize, the strategist says that “equity markets can stomach it,” although he emphasizes that earnings would become crucial for market performance.
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