The three major indexes (^DJI,^GSPC, ^IXIC) closed higher on Monday. Investors kept a close eye on Washington as they digested the news that President Biden dropped out of the 2024 presidential race and endorsed Vice President Kamala Harris to be his successor.

Michael Kushma, senior portfolio manager at Morgan Stanley Investment Management, says it's still too early to know how the election will turn out. That's why he is advising investors to pay more attention to whether the Federal Reserve cuts interest rates two or three times this year rather than election odds.

Kushma thinks the Fed will cut this year. He thinks they want to be able to say, "We don't need an easy monetary policy, but we do need a less restrictive monetary policy," citing inflation near its target and rising unemployment as reasons to cut rates.

Watch the video above to hear what Kushma has to say about the inverted yield curve.

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This post was written by Stephanie Mikulich.