Stocks (^DJI, ^IXIC, ^GSPC) are recovering as markets look to the Federal Reserve to cut interest rates in September amid signs of cooling inflation. Allspring Global Investments senior portfolio manager and head of global liquidity solutions Jeff Weaver joins Wealth! to discuss market and Fed outlooks.
Weaver highlights July’s CPI data, calling it “good for the Fed,” as well as markets and consumers. He notes the economy remains “strong,” with interest rates coming down incrementally, “and that’s what’s driving a lot of flows.”
One risk Weaver points out is a rise in the unemployment rate. He notes that a continued increase in this figure has raised concerns the economy could “move into recession.” However, he believes this is why the Fed will implement a 25-basis-point cut at the September meeting, which would “help avoid the risk of recession.”
For investment strategy, Weaver advises investors to “extend the duration of fixed income holdings” and turn to money market funds to diversify portfolios and avoid extended risks.
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