The Fed Is Done Raising Interest Rates As Inflation on Path Lower, Says Fundstrat’s Tom Lee
Fundstrat Global Advisors managing partner Tom Lee thinks the U.S. Federal Reserve is done raising its benchmark interest rate.
In a new interview with CNBC, Lee says that’s he optimistic about the market and inflation numbers.
“I think [last week’s] CPI (consumer price index) report kind of shows that inflation’s on a glide path lower. The things that are still inflationary – like auto insurance, motor vehicle repair – aren’t things the Fed’s necessarily trying to target with higher rates, but it’s more of a supply-chain work-through.
So I think over the next three months, we could see core CPI at 0.2 or less. That would really allow the Fed to breathe easier, and that’s why I think the last hike was July.”
The Consumer Price Index (CPI) is typically used as a proxy to track inflation rates. Traders keep a close eye on the metric as it could potentially signal whether the Fed would continue to raise interest rates.
Last week’s CPI report indicated consumer prices rose 0.2% in July, which the White House described as “at market expectations.”
Lee, however, notes that many stock market traders do not share his optimism.
“I don’t think people are even that bullish. I mean this week everyone’s been quick to turn bearish. One just has to look at the comments from a lot of folks and they’re already back in the hard landing camp…
Yet we know investors pulled $115 billion out of the stock market this year and there’s $500 trillion in cash, and mortgage rates could drop pretty dramatically. If the Fed is done and the [US 10-year treasury note] stays at [4%], mortgages should drop to 5.5%. That’d be hugely stimulative next year.”
I
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Swill Klitch/Sensvector
