The Federal Reserve is correctly maintaining a stance that interest rates will remain higher for longer, causing a necessary repricing of risk assets.

“I think the markets were really trying to force Jerome Powell to start the cutting cycle and now they had to move the date at which they could expect cuts out by a year and I think that we're only starting to see the reverberations of that”

The Federal Reserve's recent interest rate cut and the decision to conclude the reduction of securities holdings are bullish for the economy.

“In my opinion, are we going to get 25 in December? Probably. We'll probably get 25 in December. Does Powell want to promise that now? No, of course not. But it's all going to come down to what we see in that weekly unemployment claims data.”

He suggests that rate cut expectations could move forward if the labor market continues to weaken.

“But obviously, if the if the jobs numbers get worse, then that could move up substantially.”

The Federal Reserve should implement policy actions that align with economic data to maintain credibility.

“Uh you do that by taking policy actions that are consistent with the data.”

The Federal Reserve is set to begin its March policy meeting and release an interest rate decision.

“The central bank begins its March policy meeting on Tuesday and issues its decision on interest rates Wednesday.”