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 economic 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 charge reduce this yr. And I nonetheless assume that as a result of the US economic system could be very resilient. The patron hung in there extraordinarily nicely over the previous three years when the Fed raised rates of interest. And now the patron has held up, I feel, fairly nicely with the tariff uncertainty.
And capital spending, for all of the considerations that uncertainty would put a hammer to capital spending, the truth is that expertise 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 biggest capital market on this planet. There’s nothing prefer it. Positive, we’ve received lots 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 need to purchase them. And so they received 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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