As earnings season approaches and uncertainty around Federal Reserve rate cuts still looms, J.P. Morgan Managing Director & Global Market Strategist David Lebovitz joins Yahoo Finance Live to discuss which factor may play a bigger role in influencing rate cut predictions — FedSpeak or earnings.
Lebovitz believes that both earnings and Fedspeak will contribute to shaping rate cut predictions; however, he emphasizes that it all remains data-dependent. Regarding upcoming inflation reports such as Friday's jobs report, he states that if the data arrive in line with expectations, Fedspeak may "take a back seat" to earnings.
He notes that earnings growth "depends on the way the macro environment plays out." If a Goldilocks scenario materializes, the S&P 500 (^GSPC) could easily reach highs, but if disinflationary trends continue, upside could become "more challenging."
As bond market volatility continues, Lebovitz suggests it is evidence of "persistent uncertainty about what's happening with inflation." However, he adds, if data and FedSpeak can support Fed rate cuts, this could "bring bond volatility lower."
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