Uncertainty has engulfed the Federal Reserve's monetary policy path, with markets recalibrating their expectations in response to persistent high inflation data. RBC Capital Markets US Economist Michael Reid joined Yahoo Finance to discuss the his rate cut outlook.
With new inflation prints scheduled for release this week, Reid's attention is focused on services spending, stating that it could drive overall GDP growth. Additionally, he emphasizes the importance of monitoring the housing sector and how the pressures in that market impacts PCE inflation.
Reid expresses his expectation that "the labor market will remain tight." With more individuals retiring, he sees the unemployment rate staying lower and more upward pressure on wages. However, he also foresees a tailwind emerging from consumer spending driven by retirees, potentially fueling economic growth.
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