Rate Policy Will Always Be a Top Priority for Wall Street, Says Strategist

The long-awaited Federal Reserve decision was announced on Wednesday, September 18, with the Fed taking a big swing and cutting rates by half a point. Ahead of the decision, Yahoo Finance markets editor Jared Blikre and producer Sydnee Fried were joined by J.P. Morgan Asset Management global market strategist Jack Manley on the latest episode of Stocks in Translation to discuss its implications. “Anytime you have either a Fed meeting or an opportunity to hear from a Fed governor, including Jay Powell, that's where all the attention needs to be,” Manley says.

This meeting, in particular, drew extra interest from investors as it marked the first rate cut since March 2020. “We’ve been talking about this rate cut since the hike started,” Manley continues. “I was having conversations last year with clients where people were convinced the Fed would be cutting last November, last December.”

In the podcast, Blikre and crew also break down the phrase of the day, “dual mandate,” which actually has 3 pillars: maximize employment, stabilize prices, and moderate long-term interest rates. They also discussed the recent transitory inflation period, noting that June’s CPI data hit 9.1%. “Inflation had never been this bad. So the Fed paid like pathological attention to it… Since then, though, inflation has gotten a whole lot better... We went from 9.1% to 3.0% over a 12-month period from June of 22 to June of 23,” Manley adds.

Finally, the team turned to tech stocks, as the “Magnificent 7,” which includes Alphabet (GOOG, GOOGL), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). pushed the S&P 500 (^GSPC) to its best week since November 2022. “If you look at earnings growth within the S&P 500, at least the Mag Seven's been the only game in town... They grew their earnings by something like 30, 31% in 2023,” Manley notes.

Find this episode's transcripts and more episodes of Stocks in Translation at https://finance.yahoo.com/videos/series/stocks-in-translation/

Thoughts? Questions? Fan mail? Email us at yfpodcasts@yahooinc.com.

Yahoo Finance's Stocks in Translation is hosted by Jared Blikre and Sydnee Fried, and produced by John Tejada.

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