No Cuts? No Problem.
Jack Janasiewicz and Brian Hess discuss the March CPI print, the outlook for interest rates, growth, earnings, and current positioning in the Natixis model portfolios.
- Another month and more new all-time market highs.
- A broad rotation continues and this is healthy for the broader markets.
- While the March CPI print came in hotter than expected, the path to 2% inflation was never going to be smooth.
- There are many differences between the Consumer Price Index and the Personal Consumption Expenditures Price Index (PCE) favored by the Federal Reserve. We wouldn’t be shocked to learn that the next PCE looks more benign than the story implied by the CPI.
- Are rate cuts completely off the table? Not yet. Two to three cuts are still in play for the full year.
- But we’re also seeing continued signs of higher productivity – doing more with less. And this helps with corporate profit margins.
- When and how much the Fed cuts matters little as growth remains robust, labor markets are strong, real incomes continue to grow, and inflation continues to normalize.
- We’ve said it before, and we’ll say it again: That’s pretty bullish.
- Based on this positive macro outlook, the Natixis model portfolios are positioned in a pro-risk fashion, overweight equities and underweight fixed income across our model sets.
Investing involves risk, including the risk of loss. The views and opinions are as of April 11, 2024 and may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third party sources, it does not guarantee the accuracy, adequacy or completeness of such information.
Natixis Advisors, LLC provides advisory services through its division Natixis Investment Managers Solutions. Advisory services are generally provided with the assistance of model portfolio providers, some of which are affiliates of Natixis Investment Managers, LLC.
Natixis Distribution, LLC is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers, LLC. Natixis Investment Managers does not provide tax or legal advice. Please consult with a tax or legal professional prior to making any investment decisions.
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