Federal Reserve Chair Jerome Powell delivered a hawkish commentary on Wednesday, accompanied by a 25 basis points rate cut, but the markets have slipped for two consecutive days. Louis Navellier, Chairman and Founder of Navellier & Associates, believes that the Fed’s actions may be more aggressive than expected.
Navellier thinks that the Eurozone’s largest economies, Germany and France, are slipping into recession, which could lead to further interest rate cuts by the European Central Bank. He expects this to influence the US Federal Reserve, potentially resulting in up to four rate cuts in 2025.
Despite Powell’s comments that the Fed’s year-end inflation forecast has “kind of fallen apart,” Navellier remains optimistic about the market. The analyst believes that if earnings continue to rise as expected, the current pullback could become a buying opportunity.
Markets have reacted negatively, with the SPDR S&P 500 ETF Trust (SPY) falling by 3.33% over the last five trading sessions and the Invesco QQQ Trust (QQQ) slipping 3.06% in the same period. On a year-to-date basis, both ETFs are up 24% and 27.72%, respectively.
Navellier’s predictions suggest that investors should be cautious but also consider buying opportunities as earnings continue to rise.
Source: https://www.benzinga.com/24/12/42610958/expecting-up-to-four-fed-rate-cuts-in-2025-says-this-analyst-despite-hawkish-powell-saying-it-was-close-on-the-decision-to-cut-or-not-heres-why