How policy impacts the Fed's 'data-dependent' strategy
US futures remain strong, but their trajectory heavily relies on the performance of the Magnificent Seven — the group of tech stocks comprising Alphabet (GOOG, GOOGL), Apple (AAPL), Nvidia, (NVDA), Tesla (TSLA), Amazon (AMZN), Meta Platforms (META), and Microsoft (MSFT) — which is currently showing some signs of pause. Scott Chronert, Citi head of US equity strategy, joins Morning Brief to note that the Federal Reserve's decisions, based on data, will significantly impact the market. "What we've learned from the Fed [is] they've been, quote, data-dependent for years ... so I don't know that the Fed is going to move in anticipation of Trump policy effects. I certainly wouldn't expect that," Chronert says. "Where we get a little bit more nervous is if we see rates back up towards the five handle. But again, the countervailing force on that is that you're taking a little bit of pressure off of forward expectations on yields, courtesy of some of the initiatives to look at ways to streamline government spending, which really were not in the policy discussion several months ago," Chronert notes. Additionally, Chronert believes a hawkish Fed doesn't necessarily spell trouble for stocks as long as there’s a fundamental offset. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. This post was written by Josh Lynch
