Federal Reserve Governor Michelle Bowman, the sole dissenter to last week’s 50 basis point cut, says economic conditions warranted “a more measured approach.” Irene Tunkel, BCA Research chief US equity strategist, joins Seana Smith and Brad Smith on Morning Brief to break down her view that the Fed successfully facilitating a soft landing is more luck than skill.

Tunkel tells Yahoo Finance, “I would not say that we're in a recession. We are not in a recession right now. I think that the reason we say fragility and generally, you know, have a slightly more bearish tone to everything we write is we do not like the trajectory of the US economy.”

She says “What worries us the most. The direction of the job market. So it's not about the unemployment rate per se, but it's about some of the leading indicators of the job market, such as job openings such as [the] number of people working part-time for economic reasons; there is plenty of other ones. So basically, if you lose a job, it's a little harder to find a job. So I think the job market is now in the center of this discussion.”

“The reason that the Fed did 50 bps is because they were responding to the same concerns. So, yes, [the] economy is strong as of now. You may say that it is in a soft landing. Now, the problem is that soft landing is almost like a temporary state. And so to stay here would require lots of luck. I would say even more than skill.”

The strategist says the Fed needs “to balance the risk that they will reignite the economy and inflation will go up. And there are many sorts of negative repercussions to that. First, they may have to reverse the easing cycle and have to raise rates.”

She explains the Fed is in a difficult position as the main tool they have is to move rates, but “they don't see the effects of the rates until they kind of go through the economy, which is three to six months… these long and variable lags make it very difficult and the reason that I say skill versus luck, they may be very skillful. And I would say that so far, they've been doing an amazing job. But to keep the economy where it is, keeping it in balance is a hugely difficult task.”

Following last week’s cut, the market (^DJI,^GSPC, ^IXIC) has soared to new highs. Tunkel says this is “the initial reaction that we pretty much get at the very at the beginning of every easing cycle, and after that, people kind of stop and pause as they do now and say, ‘What does it really mean? Why did they go 50 bps?’ And it's not like the Fed knows something we don't not know.”

Tunkel says the 50 basis point cut “underlined their concerns about the employment side of their dual mandate. And if that is so, so they are not just, you know, normalizing which they do." The strategist says “investors should position defensively” with exposure to “sectors and companies who have very stable earnings streams,” like utilities, telecommunications, and consumer staples.

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This post was written by Naomi Buchanan.