The major US indexes (^DJI,^GSPC, ^IXIC) are edging higher as investors brace for the Federal Reserve's highly anticipated interest rate cut in September. Hennion & Walsh CIO Kevin Mahn joins Market Domination to discuss how the market will react to the rate cut and what the Fed's cutting cycle could look like.

Mahn believes that the Federal Reserve will initiate a 25-basis-point interest rate cut at its September meeting, explaining:

"I think they [Fed officials] don't want to go beyond what they've already clearly communicated, all the way back in March, when they were suggesting at that time three rate cuts of 25 basis points each. We still have three meetings left. I think we still get those three rate cuts of 25 basis points each, and they'll take a very gradual pace from that point forward until the Fed funds target rate gets back to 3%."

Because the Fed has been data-dependent, Mahn argues that "by definition, they're always going to be late to the party." He explains that Fed Chair Jerome Powell is trying to navigate a fine line as he seeks to cool inflation to 2% without sending the US economy into a recession:

"I wish he would have cut at the last meeting. I think that would have been the appropriate time to start the rate-cutting campaign."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl