August jobs report left investors uncertain about what the Federal Reserve will do with monetary policy. Ahead of the highly anticipated CPI print on Wednesday, Macrolens Chief Strategist and Managing Principal Brian McCarthy joins Catalysts to discuss his outlook on the Federal Reserve.
McCarthy expresses concern that markets (^DJI, ^IXIC, ^GSPC) believe "the Fed is behind the curve" when it comes to needed interest rate cuts. He suggests that if the Federal Reserve opts for a 25 basis-point cut in the upcoming FOMC meeting, it may not be enough to satisfy investors. As a result, this could spark renewed market volatility, similar to the early August lows.
As far as the job market, McCarthy notes that weakness had been "disguised by outsized hiring in the government and healthcare sectors." As those sectors begin to rebound, the weakness is being exposed in the broader labor market.
For more expert insight and the latest market action, click here to watch this full episode of Catalysts.
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This post was written by Angel Smith