Fundstrat’s head of analysis, Tom Lee, says the Federal Reserve could also be pressured right into a rate-cutting section after overdoing financial tightening.
In a brand new interview on CNBC, Lee says he’s waiting for a degree when the Fed might run into an “accident,” the place it waits too lengthy to handle a slowing financial system.
Lee says he’s anticipating a possible “panic” state of affairs from the Fed.
“There might be an accident as a result of what we’re ignoring is that housing is choking and collapsing beneath the load of upper rates of interest, and the labor market isn’t as sturdy because it seems.
After we have a look at the flexibility to get a job, it’s a lot more durable. So… there’s lengthy and variable lags, and there might be an accident the place the Fed must panic, so I feel that’s one thing we’ve got to look at within the incoming information…
I feel there might be a degree the place the Fed abruptly realizes the dangers are literally to the draw back for the financial system weakening, and so the Fed will even have to reply to an financial system that they’re strangulating and actually preventing what they consider is a provide shock inflation. So I’m a bit of involved that the Fed might be late in the event that they proceed to carry.”
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