Latest news with #DrewMatus
Reuters
2 days ago
- Business
- Reuters
Wall St Week Ahead Fed meeting in focus as investors seek rate-path hints
NEW YORK, June 13 (Reuters) - The Federal Reserve's balancing act between concerns about a weakening labor market and still above-target inflation will take center stage for investors in the coming week as they weigh risks to the rally in the U.S. stock market. The S&P 500 (.SPX), opens new tab was on track for its third straight week of gains, building on a rebound in equities since early April, as the benchmark index edged closer to an all-time high. Worries about the impact of trade barriers on the economy have eased, helping drive stocks since President Donald Trump's "Liberation Day" announcement on April 2 sent the market plunging. The Fed's two-day monetary policy meeting could present the next major obstacle for markets. While the U.S. central bank is widely expected to hold interest rates steady when it announces its decision on Wednesday, investors are eager for any hints about whether the Fed might be poised to lower rates in the coming months. The fed funds rate has been at 4.25%-4.50% since the central bank last eased in December, by a quarter percentage point. "What the Fed is going to have to try to do next week is encourage the belief that they are able to act without actually promising anything," said Drew Matus, chief market strategist at MetLife Investment Management. "If they move rates lower too early before there is evidence that there is weakening in the economy that they can then point to, they raise the risk of actually boosting inflation expectations further." At its last meeting in May, the central bank said risks of both higher inflation and unemployment had risen. The Fed has a dual mandate to maintain full employment and price stability, and investors will be seeking any signs of whether officials are more concerned about one of those goals and what that means for the path of rates. One area of focus on Wednesday will be an update to Fed officials' projections about monetary policy and the economy, which were last published in March. Larry Werther, chief U.S. economist of Daiwa Capital Markets America, will be watching estimates for unemployment. While the Fed officials' last projection was for unemployment to end 2025 at 4.4%, Werther is projecting a year-end rate of 4.6%, saying recent data including jobless claims has indicated softening in the labor market. "If the unemployment rate is expected to move higher, just aligning with what we've seen in the labor market, and inflation isn't expected to move much beyond what the Fed is projecting, then it opens the door to further easing in support of the labor market later this year," Werther said. Fed funds futures indicate markets expect two rate cuts by the end of this year, with the next one likely in September, according to LSEG data. Such bets were bolstered by benign inflation reports this week. Investors are also focused on Trump's selection to succeed Fed Chair Jerome Powell, with the president regularly urging the central bank to lower rates. Trump earlier this month said a decision on the next chair would be coming soon, although he said on Thursday that he would not fire Powell, whose term ends in May 2026. The release of monthly retail sales on Tuesday will also be in focus. Investors want to see if tariffs are leading to higher prices that pressure consumer spending. Trade developments are likely to continue to keep markets on edge, with a 90-day pause on a wide array of Trump's tariffs set to end on July 8. A trade truce this week between China and the United States offered hope that the two countries can reach a lasting resolution, but the absence of detailed terms left room for potential future conflict. The S&P 500 (.SPX), opens new tab is up nearly 3% so far this year. But the index has rallied over 21% since its low for the year on April 8, and is only 1.6% off its record high set in February. "The market has rallied so hard, so fast," said Marta Norton, chief investment strategist at retirement and wealth services provider Empower. "There is vulnerability to anything that doesn't support that kind of benign narrative that has been established." Wall St Week Ahead runs every Friday. For the daily stock market report, please click
CNBC
15-05-2025
- Business
- CNBC
Drew Matus: Still expect a recession, volatility is 'name of the game' going forward
Drew Matus, MetLife Investment Management chief market strategist, joins CNBC's 'Money Movers' to discuss macro outlooks, expectations for the consumer, and more.
Yahoo
05-03-2025
- Business
- Yahoo
Biggest impact of tariffs 'could be growth,' not inflation
Stocks (^GSPC, ^IXIC, ^DJI) moved higher after a stronger-than-expected ISM services report and some relief from comments made by Commerce Secretary Howard Lutnick regarding tariffs. However, volatility remains a concern as the S&P 500 sees declines. MetLife Investment Management chief market strategist Drew Matus and Ned Davis Research chief global investment strategist Tim Hayes join Catalysts hosts Madison Mills and Seana Smith to discuss the latest developments in the economy. "If we look at the ISM that just came out, what we're seeing is that growth is OK and inflation is a little sticky, which is kind of what we had all known was going to be the case," Matus says. "The wild card is the tariff situation and what impact that has," he adds. "And I think the biggest impact from tariffs is actually not inflation; it could be growth." Regarding market movements and pessimistic consumer sentiment, Hayes notes, "Most stocks are still above their 200-day moving averages globally, and some markets like Europe are very close to new highs, so I think the sentiment is really out of line with the reality of what our indicators are telling us." He adds, "This kind of pessimism is much greater than we usually see in a correction ... I think the sentiment will come back to what the fundamentals are telling us." To watch more expert insights and analysis on the latest market action, check out more Catalysts here. This post was written by Josh Lynch Sign in to access your portfolio
