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Aptus Capital Advisors portfolio manager David Wagner joins Wealth to analyze the market implications of the Federal Reserve's latest interest rate cut forecasts for 2025, tempered around President-elect Donald Trump's return to the White House.
Wagner suggests the Fed may be positioning itself ahead of anticipated Trump policies over the next year. "It feels like the Fed is trying to get ahead of a lot of Trump's policies that he's gonna enact over the next 12 months," he explains.
Wagner describes Trump as the "nominal GDP [gross domestic product] growth candidate," noting his understanding of the debt crisis urgency. According to Wagner, there are three potential approaches to addressing the debt crisis: austerity, growth, or inflation.
"I think Trump's policies are going to focus on growing out of it but also inflating our way out of it," he notes. This strategy concerns the Fed due to its potential to increase fiscal spending.
On investment strategy, Wagner states: "You just want to own stocks." With inflation remaining a primary investor concern, he cautions against overreliance on traditional fixed-income investments (^TYX, ^TNX, ^FVX), stating, "When rates stay higher for longer, you cannot just focus and depend on traditional fixed income."
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This post was written by Angel Smith