While inflation has moderated from its peaks during the pandemic, it remains above the Federal Reserve's 2% target despite the central bank's efforts.

Apollo Global Management (APO) chief economist Torsten Sløk joins Market Domination with Julie Hyman and Josh Lipton to discuss his expectations for the Fed's next move and the US economy.

"The key question then becomes 'What does the Fed need to do today to get inflation back to 2%?' And our strong opinion at the moment is that they need to keep interest rates higher for longer," Sløk says, explaining that he expects the Fed to announce a rate cut at its final meeting of 2024 and hold rates steady at the following meeting "because now they need interest rates to stay higher in order to slow the economy down enough to begin to get inflation down to 2%."

The economist notes, "GDP growth has been remarkably resilient since the Fed began to raise interest rates in March of 2022," which is "the reason why the S&P 500 has done so well."

"The economy continues to do so well, and, therefore, why the Fed does not need to cut interest rates as much as they thought just six months ago," he says.

Disclosure: Yahoo Finance is owned by Apollo Global Management.

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This post was written by Naomi Buchanan.