But we feel like there's little to propel it distinctly skyward or distinctly the other direction either, and that we're likely to stay rangebound. It's been nice popping off the lows that we saw reached in January or February this year. And I think that's why our prognosis is, is that you'll see a rangebound market. Could we potentially see a sell-off? And how bad could it get?ĬAROL SCHLEIF: You could see a sell-off. Carol, what happens if that doesn't happen, if the Fed continues to raise.

Because around the globe, inflation still stays higher than people want to see it. And we do think that the Fed holds in here and watches as inflation comes down. And the markets are clearly pricing in cuts by later in the year. You have a little bit of optimism in today's numbers based on the PCE and some of the data that we've seen come in that shows- that seems to support the inflation having peaked narrative.īut we do not believe that you'll see cuts this year. And the most interesting thing in a long investment career has been seeing how hard the markets have been fighting the Fed commentary, because chairman Powell and the crew have been very blatant about wanting to fight inflation. How much of that has already been priced in given the gains that we've seen?ĬAROL SCHLEIF: Well, I do think a fair amount of that's been priced in. How much has a potential Fed pause or even a pivot by the end of the year. That's been the case now for quite some time. Carol, lots of focus here, obviously, on Fed policy. We should start seeing some of that or hearing some of that as we get earnings released beginning next week. You saw it come through in the quarterly results last quarter.

Tech will play a piece of that.īut there's a lot of other industries that will participate in that as well, not the least of which is some of the industrial goods companies, some of the mining manufacturers, and things like that. There's a lot of stuff that was teed up in three very distinct funding packages over the last year and a half that puts over a trillion- close to a trillion and a half dollars- of funding and credits and things back into the environment. And I think getting people to focus on the fact that we do have a lot of spending teed up in this economy that's aimed at very critical infrastructure, it's aimed at building out green technology, green grid, electronic vehicles. So Carol, then, what's the next catalyst here to keep that momentum then intact?ĬAROL SCHLEIF: I think the interesting thing is, is we need to see the momentum broaden out. But it's important to remember that the economy overarching has a pretty solid base underneath it. So given that beaten up nature cash on the balance sheet, there's been a lot of call or a lot of rotation back into those. And the economy overall is pretty strong. It's both a growth-oriented play as rates have come down, but it's also a piece of a defensive play given how beaten up the stocks were last year when you're looking at who has cash on the balance sheet, was less of a need to use the financing avenues that may or may not be available to the broader industry, and who has reasonable prospects for participation going forward in terms of looking at as we rebuild this economy and put things back in order.

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