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Several Federal Reserve leaders offered commentary this week, suggesting that the central bank will remain patient before cutting interest rates. The debate as to when the Fed will cut rates continues, as some analysts believe the Fed will push back rate cuts.
Morgan Stanley Wealth Management Managing Director Dan Skelly joins Market Domination to give insight into the state of the economy and why he believes the Fed will cut interest rates multiple times by the end of the year.
Skelly explains that his economics team has identified notable surprises in the first couple of months of the year which may reverse in the coming months: "Namely, shelters and rents we think might be on more of a disinflation path in the second half. We continue to see widespread penetration of immigrant labor, which is happening at lower wage clips on average. We think the slowdown in wages that we've seen somewhat may continue, and then just lastly, goods, seemingly continued to disinflate with China exporting deflation with all the excess capacity going on there. So, look, I think there's some reasons to believe some of these surprises may reverse. Our official call at the moment is for still three cuts starting in September of this year. "
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This post was written by Nicholas Jacobino