The president of sell-side Wall Avenue agency Yardeni Analysis, Ed Yardeni, believes that the Federal Reserve will keep the course and maintain rates of interest at present ranges.
In a brand new CNBC interview, Yardeni says he doesn’t anticipate any financial coverage easing, citing a resilient US financial system fueled by sturdy family spending and robust capital investments from tech corporations.
“I used to be not anticipating that there can be a Fed price minimize this 12 months. And I nonetheless suppose that as a result of the US financial system may be very resilient. The patron hung in there extraordinarily properly over the previous three years when the Fed raised rates of interest. And now the patron has held up, I feel, fairly properly with the tariff uncertainty.
And capital spending, for all of the considerations that uncertainty would put a hammer to capital spending, the fact is that know-how capital spending, which now accounts for over 50% of complete capital spending, stays very sturdy.”
Yardeni additionally believes that the attract and demand for US Treasuries will stay sturdy.
“The US is the most important capital market on the planet. There’s nothing prefer it. Certain, we’ve bought plenty of debt. However individuals have been shopping for that debt as a result of they do need Treasuries.
So no, the worst that may occur within the Treasury market, as we noticed in 2023, is yields go as much as ranges of which individuals wish to purchase them. And so they bought as much as 5%, individuals wished to purchase them. And earlier than you recognize it, the yield got here proper again down.”
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