Market is excessively optimistic on Fed cuts and trade, top economist warns

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Market optimism is reaching excessive levels, top economist warns (via TradingNation)

Tilley, who is on Wilmington Trust's investment strategy team and is a former economic advisor to the Philadelphia Fed, believes the central bank will cut rates by a half point in July — which is on the high side of Wall Street estimates.

"At this point, we think it's pretty much baked in that you're going to get those rate cuts on July 31," said Tilley. "The data is slowing down enough to merit what the Fed has done. And, that's to project that you get that rate decrease."He contends a lot is at stake for Wall Street right now as President Donald Trump and Chinese President Xi Jinping get ready. If their talks suffer a critical setback, Tilley predicts the record rally will fold.

"It really comes back to the trade and tariff. That is really what we need to watch," he said. "We had been at Wilmington Trust overweight U.S. equities for several years — up until that first week of May when the trade discussions sort of broke down."

 

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