AAP Podcast #46 – The Fed Hikes Rates Again, What’s Next?

On the abbreviated AAP podcast episode, lead AAP portfolio manager Chris Versace shares his reaction to the Fed’s June policy statement that lifted the fed funds rate by another 25 basis points and comments on Fed Chair Powell’s press conference. As he and the AAP team suspected, Powell and the Fed trotted out the “data dependent” line, calling out there are a number of data points in the coming eight weeks that will influence the next policy decision. We also share the view that while the market is currently focused on when the Fed may stop hiking rates, we expect it will eventually turn its focus to when the Fed may deliver the first rate cut. Per Powell’s comment today, monetary policy will remain in restrictive territory for some time. In our view, it will be the data that tells us when the rate hiking cycle is over and when we could see that first rate cut. As we digest the data coming in the weeks and months ahead, we’ll continue to update our view for monetary policy as well as the economy, earnings, and other relevant inputs that shape our thoughts for the AAP portfolio.