Deikis Powell needs a ‘good reason not to cut rates,’ says Principal Asset Management’s Seema Shah

In response to the Federal Reserve’s decision to hold rates steady, Principal Asset Management’s chief global strategist Seema Shah said, “Powell has perhaps shown his cards: he needs a good reason not to cut rates, rather than a reason to cut rates. Markets perhaps couldn’t have asked for more from the Fed and equities will celebrate.”

“The Fed really really wants its soft-landing ending. Stronger growth, lower unemployment, higher inflation–and yet still no change to the median dot,” Shah continued. She emphasized that cutting rates before inflation is close to the Fed’s 2% target, and while GDP growth is above trend, is a “risky path.”