Market analyst Stephanie Link said on Monday that the Federal Reserve will continue to keep its policy on the horizon, as it ignores potential pain in the stock market to focus on controlling inflation.
“The Fed it’s not going to start soon,” a senior economist at Hightower Advisors told CNBC.
Mr Link added that Fed Chairman Jerome Powell may not take stock market earnings into account. Instead, he hopes to focus on the next generation, which has been on the rise in recent readings.
“I don’t think they’re going to look at the markets. They’re going to look at the data and we’ll see, in the next few months, what that looks like,” he said. “Unfortunately, [inflation is] it’s going to be bigger for a long time, which is why prices should stay high for a long time. “
S&P 500 (SP500) (NYSEARCA: SPY) spiked 3% last Wednesday after Powell gave a speech that included signs that the Fed could begin to reduce its rate hike at the beginning of the upcoming policy meeting, which is scheduled for the middle of this month.
However, the benchmark equity average has not advanced since then, falling slightly on Thursday and Friday. In fact, Wednesday’s rally was the S&P 500’s highest finish in the past six sessions.
On a broader level, Link was asked about what could be causing the stock to come in the near future. He noted an upcoming medical event at GE (GE), as well as a financial day for Lowe’s (LOW).
In terms of what’s to come, Link points to releases expected in the next few days from Broadcom (AVGO) and Costco (COST). AVGO follows the results of Marvell (MRVL) last week. Meanwhile, COST’s results come on the heels of disappointing sales results.
For more on the market as a whole, see why Morgan Stanley economist Mike Wilson believes it may be time to take profits after the recent bear market rally.