The Federal Reserve has come out of its twoday FOMC meeting deciding to keep interest rates unchanged between the target range of 5.255.5%. The decision marks a twodecade high for the sixth straight meeting to keep rates this high. The debate as to when or if the Fed will cut rates continues to rage on in anticipation of its next meeting.
Thornburg Investment Management CoHead of Investments and Portfolio Manager Jeff Klingelhofer and Threadneedle Ventures Founder Ann Berry join Market Domination to give insights into the Fed's latest monetary policy move.
Klingelhofer argues that the Fed is " going to have to be datadependent. I do think that we are seeing slowing in the underlying economy and that will feed through a reslowing of inflation. But the Fed has created a very sticky inflation on the back of the focus on unemployment and bringing up the lowwage income earner." He continues by claiming that the Fed will cut rates after the election cycle.
Berry, on the other hand, argues: "I think there is an issue here around, let's look at the mandate of the Fed: 2% inflation target for maximum possible employment under the circumstances. I'm still slightly perplexed as to why there could be a rate cut because absent a really tough recession that gets us well below that 2% target or well below full employment, I don't understand what the rate cut catalyst is right now."
She continues by affirming: "I think no move at all because I think at this point, the Fed has been signaling so strongly that the rate cut is on the come, but I'm in the camp of no move at all."
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