The Market Had Gotten Ahead Of Itself: Tom Essaye Quoted in Barron’s
Stocks Drop as Market Dials Back Fed Rate-Cut Expectations After CPI Data
Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the report didn’t imply that inflation was bouncing back significantly, the market had gotten ahead of itself by pricing in inflation crashing to the Federal Reserve’s 2% target.
“I think this is more symptomatic of a market that’s frankly, gotten ahead of itself on what it expects to happen,” Essaye says. “And we’re having that expectation dialed back now.”
“It’s just one report, but I think it is a little bit of a reminder, and an important one, that what has really fueled this rally since October has been the assumption of Fed rate cuts and falling inflation,” Essaye says. “And while that likely will happen later this year, it may not happen as soon as they expected. And I think that’s what we’re seeing in markets.”
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