Bloomberg Talks
BlackRock’s Russ Koesterich Talks June Rate Cut Prediction
Feb 14, 2024
BlackRock Global Allocation Fund Portfolio Manager Russ Koesterich predicts a rate cut in June despite a stronger CPI report. He advises staying long on equities. The podcast discusses recent market sell-offs, inflation impact on investments, and opportunities in certain parts of the market. They highlight the resilience of the US economy and their preference for companies in the US tech, healthcare, and consumer discretionary sectors.
06:42
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- The Fed is expected to cut rates in June despite a hot CPI report, with inflation decelerating but certain areas remaining sticky.
- BlackRock recommends a barbell investment strategy, favoring tech mega-caps and higher quality cyclicals in sectors like airlines, autos, consumer, and healthcare.
Deep dives
Inflation expectations and Fed rate cuts
The recent hot CPI report has led to a pushback in expectations for Fed rate cuts, with BlackRock holding on to June as the most likely month for the Fed to begin cutting. While inflation is decelerating, there are parts of it, particularly on the service side, that remain sticky and not sliding as quickly as anticipated. The narrative surrounding rate cuts has been tempered, with the expectation now being three to four cuts instead of the previously anticipated seven to eight cuts. Despite the slight setback, the stock market is still expected to perform well, especially for US equities, which are projected to have a decent year with potential gains of 6% to 8%.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
