Loading ...She is skeptical that the Fed can stave off a recession — even if it continues to cut rates. That’s because of growing signs of weakness in the services sector that powers the US economy.
Which is why DiMartino Booth believes the Fed will pump as much liquidity into the markets as it can to keep the economy and stock market humming along.
“The markets are not happy, they’re euphoric. Despite earnings being on a decline, that is the longest on the postwar era– markets are trading at all time highs,” DiMartino Booth said. “This is all about the Federal Reserve and hopes that…Powell & Co will print as much liquidity as needed to keep the rally and economic expansion alive.”
One more rate cut and then hit the pause button?
But investors should be wary of the stock market’s recent rally, because individual companies’ fundamentals no longer justify their current prices, DiMartino Booth said. Stocks are up mainly on hopes of more help from the Fed,
With sky-high valuations and the Fed unlikely to be able to stave off a recession, DiMartino Booth is not sure the Fed should be lowering rates much further at this point.
https://www.cnn.com/2019/10/29/investing/markets-now-preview-federal-reserve/index.html