“I fully expect, though, about a 1% cut by the end of the year.” – 01:25
David Stryzewski, CEO of Sound Planning Group, joins Remy Blaire to discuss the current economic landscape and the implications of the Federal Reserve’s upcoming decisions on interest rates.
The segment opens with a discussion about the Fed’s potential rate cut, with Fed funds futures indicating a 79.2% chance of a cut in September. David explains that recent economic data, particularly regarding wholesale prices, suggests that inflation pressures are building, which may lead to a pause in rate hikes for the time being. He anticipates a 25 basis point cut soon, with a total of about a 1% cut expected by the end of the year, especially as challenging economic data is anticipated in the coming months.
As the conversation shifts to the equity markets, David notes the recent pullback in big tech stocks, despite the market hovering near all-time highs. He emphasizes that while big tech will continue to lead, other sectors, particularly metal mining, are poised for growth due to their essential role in AI and data centers. David highlights the importance of semiconductors and metals like silver in the ongoing technological evolution, suggesting that these sectors may see significant gains.
The discussion then moves to the bond market, where David expresses concerns about the junk bond sector. He warns that rising interest rates make it increasingly difficult for less creditworthy companies to survive, and he cautions listeners that bonds can be volatile and can lose value in multiple ways. He encourages consideration of alternative investments to mitigate risks.