Ben Emons, Founder and CIO of FedWatch Advisors, breaks down the data and economic signals the Fed will watch before deciding on a rate cut this December.
Transcript:
Caroline Woods: Well, Powell did spook markets with comments about really having a lack of conviction of a December rate cut. But what’s it going to take for the Fed to cut again?
Ben Emons: I think what it’s going to take is that once they get access to the official data, because I think that was one reason why Powell mentioned these words of like far from it. It’s not a conclusion to cut rates again in December. Far from it. There’s kind of a strong message I think. But I think it has to do with that. If we don’t have good visibility here of where the economy exactly is, you can’t make an informed decision. So that is one reason. But the other reason would be related is that if that data does become available and it shows that we have more weakness in the jobs market coming through, as maybe these layoffs seem to be indicating, then that would be for the Fed. Definitely a reason to lower rates. So it’s still, it’s still out there right. It’s in it. We’re not we’re not done yet. It’s still I don’t think 6 to eight weeks from now that next meeting. So let’s see what happens. But I think the Fed has made a firm decision on lowering rates 100% in December.
Caroline Woods: What do you think’s going to happen come December and come next year when it comes to rate cuts?
Ben Emons: Well, I have always been of the view, Caroline, that we do deal with an economy that gets a fair bit of push in the future, meaning we’re getting stimulus from the big beautiful bill. That’s Stephanie adding stimulus to the economy. We obviously have now decline in interest rates has happened this year. So that is stimulating. We’re getting some resolutions and resolve of the trade disputes that we’ve seen. So the tariffs are not going to go as much up as much anymore. Maybe go a little bit down. So that will help. And then lastly, which is really important is, of course, not only the spending on I the proceeding, but the investment that is going to already taking place or going to take even more place that particularly the investment. I think that’s the big story. And I think that will bring the economy much stronger path. And if that’s the cas
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