Economists: need to be cautious betting on Fed rate cuts

Kathy Bostjančić, a Fed watcher and chief economist at Nationwide Mortgage Corporation (Nationwide), cautions that people need to be cautious about betting on a Fed rate cut. She argues that investors are too eager to digest the impact of a rate cut, and as fears of a sharp economic slowdown intensify, they generally expect the Fed's protective policies (Fed put) to provide a cushion that will economic activity. And even assuming there is no sharp drop in economic activity, high sticky inflation, coupled with inflationary pressures from tariffs, could keep the Fed on the sidelines for longer than the market expects.