As markets continue to anticipate a possible interest rate cut from the Federal Reserve, Nancy Tengler, CEO and CIO of Laffer Tengler Investments, appears on Market Domination Overtime to discuss why she believes Fed policy is playing a lessening role in current market movements.
Tengler argues that if the Fed were to cut rates this year, “it wouldn’t have a big impact” on markets. He criticized the Fed’s data-dependent approach, saying the central bank “waited too long” and “changed its tune” on too many issues, reducing the central bank’s influence.
“I think they’re itching to cut. [rates]” Tengler told Yahoo Finance.
For more expert insights and the latest market trends, click here to watch this entire episode of Market Domination Overtime.
This post Angel Smith
Video Transcript
Does it matter what the Fed does?
no.
No, it stops completely.
It doesn’t matter what the Fed does.
Why not?
Well, if they cut, and I think they probably will, they’ll cut once, maybe twice.
And really, there hasn’t been much movement in that regard.
Well, back in the ’90s, Chairman Greenspan understood how productivity affected inflation.
And he was actively raising funds in ’94.
He cut it twice in ’95 and once in early ’96, then left it alone for a few years.
And that’s why I believe rising interest rates can coexist with robust stock price gains.
You know, you’re talking about Greenspan.
Ah, those were times of irrational enthusiasm.
It will probably be around there someday.
Let me coin a term. Um, but you’re talking about the current Federal Reserve System, and I like what you have in the title.
One note here is data dependent and new and temporary.
Did the Fed step in here too?
You know, I was very critical.
It’s starting to get pushed back, but, you know, I think they’ve waited too long.
We know that if you raise interest rates, they will completely change their attitude on many issues.
And one thing that I thought was a really interesting parallel is that Christine Lagarde said the word dependents, I think, 20 times in her press conference.
She also raised inflation forecasts and lowered interest rates, although her primary criterion for lowering rates was whether wages remained steady.
But it actually went up.
And we’re in a similar situation here. The Chairman said in his last press conference that 2.6 to 2.7 is not a bad range for inflation, and that’s the hint to me.
And at the press conference just before that he said that if Labour goes soft, we will step in and act, and Labour will cave in.
So I think they’re itching to cut it.
Well, they also raised their inflation forecasts for this year and next.
But the cuts are still on the table.
So I think the Fed’s comments are completely worthless.
Well, maybe an average person like you shouldn’t let that dictate your portfolio decisions.
