Ed Yardeni expects two rate cuts in the US later this year
Ed Yardeni, President of Yardeni Research highlighted the similarity between the Indian market and the United States. Both countries have a robust bull market driven primarily by a handful of stocks.
Ed Yardeni, President of Yardeni Research expects two interest rate cuts by the US Federal Reserve later this year.
"If the economy continues to do well, all that really means that the unemployment rate stays below 4%. And it's been below 4% for 25 months in a row now. Inflation continues to come down, why mess with success? Why lower interest rates? Why rush to do that?," Yardeni noted.
He believes there will also be pushback from some of the other members of the Federal Open Market Committee, which is scheduled to meet on March 19 and 20 to deliberate on the policy decision.
Almost 97% of US traders do not anticipate a rate cut at the upcoming meet, per the CME FedWatch tool.
Yardeni also shared his view on India. While India's long term prospects remain bright, he says it might be advisable to book profits given the extraordinary run-up recently.
He pointed out that when investors worldwide consider emerging markets (EM), they have limited options.
China is struggling with the government striving to stabilise both the economy and stocks amid the impact of the real estate market collapse.
China's downturn is also impacting global commodity prices, which is not favourable for countries like Brazil.
“On the other hand, countries that import commodities, like India, get a benefit from all that. So, that has been another reason why India has outperformed,” Yardeni added.
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He noted that global stocks are at record as US economic resilience, buzz around artificial intelligence and growth in places like India and Indonesia keep the rally going.
For the entire interview, watch the accompanying video
(Edited by : Shweta Mungre)
First Published: Mar 11, 2024 12:34 PM IST
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