Fed won't hit 2% target until 2026: Economist

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Fed won't hit 2% target until 2026: Economist
The Federal ReserveLabor MarketJosé Torres
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With somewhat cooling inflation and stagnant labor market growth, conversations about whether the Federal Reserve's interest rate cut timing persist...

With somewhat cooling inflation and stagnant labor market growth, conversations about whether the Federal Reserve's interest rate cut timing persist. Interactive Brokers senior economist José Torres joins Market Domination to give insight into the labor market , the broader stock market, and the Fed's future policy decisions.

So consumer spending has been erratic, particularly amongst lower and middle end in uh income consumers.So I think that the labor market and rising paychecks alongside financial markets being so robust, that's really supported a consumer spending as far as the loosening in financial conditions that's occurring.And it's going to make it quite difficult for the fed to cut in September.

But when you take a look at the longer term, right, there's lots of questions about what is going to be that new normal, what exactly the longer term neutral rate is?But I'm curious, do you think how much has the economy changed post COVID? And I think that's the market telling you that at the longer end of the curve, there are going to be some concerns.

We saw it today in ISM Services, you know, and I think that's really what's going on with the lower and middle end consumer.We spent a lot in May, let's slow it down in June and then we'll come back in July, you know, so that's really, but as that erratic this begins to increase, I become concerned that maybe we really are at the end of the consumer spending expansion, Jose, always great to have you on the show.

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