We’re about one week away until the next Federal Open Market Committee’s policy-setting meeting, with many expecting a cut in interest rates.
“This market needs the Fed to lower rates,” he said. “They've been wanting lower rates for 10 years. They've gotten it. The market's addicted to low rates. They're going to get it. We're in the 121st month of this economic expansion, and so they want it. I think they're going to get it, and they're watching.”
Recently, Yahoo Finance’s Heidi Chung reported that the Fed fund futures contracts are predicting a 75.5% chance of a 25 basis point cut and a 24.5% chance of a 50 basis point cut. The current Federal funds rate is in a target range of 2.25% to 2.50%.
“The markets want to go higher,” Peck stated. “I think the S&P wants to go about 30% higher, and it's already expecting a quarter point. I don't think it's going to get that half a point. It if it did get the half a point, we may scream higher. But this market wants to go up and to the right, and it's getting what it wants.”
Peck explained when looking at the three largest global markets — the U.S., Europe, and emerging markets — the U.S. still stands alone. “The United States is the leader and has been the leader, and people are noticing and they're continuing to push it higher,” he said. “We're putting more money into the US. [than Europe], and that relative strength is just going to continue building.”
Chelsea Lombardo is a Production Assistant for Yahoo Finance. You can find more of her work here.