Kathryn Rooney Vera Joins Fox’s Neil Cavuto Live

StoneX Chief Market Strategist Kathryn Rooney Vera was recently interviewed by Neil Cavuto on Fox News’s Cavuto Live to share her predictions on the likelihood of an upcoming FOMC interest rate cut and whether she thinks the central bank can stay independent in the face of increased political pressure.

Cavuto asked in the spot: “The Fed chairman is expected, with his buddies, … Kathryn, to cut rates. I guess the only drama, you know, would be how much? A quarter point seems the consensus, but what do you think?”

Rooney Vera replied: “I think he’s going to go 25 basis points to avoid the impact of extending high interest rates - that have been at 5.25, 5.50 for over a year - ultimately stifling the economy and leading to recession. But ultimately, two-thirds of the corporate profits are at record highs and margins are still pretty juicy for corporations.”

She further remarked on the health of a favorite investor theme in the context of policy with: “The AI trade is taking the S&P to new record highs, and I think the question now is, how much further can it go? I think the market is going to be decerning between companies that are just throwing out the term AI as a buzzword … versus companies that are actually innovating, and actually bringing the goods in terms of practical real-world application of AI principles.”

With a further focus on policymaking going forward, Cavuto asked: ”You know, Kathryn, on Donald Trump. He has mentioned that … a president should be able to weigh in on what the Fed is doing. What do you make of that, that the independence of the Fed could be pulled into question from a new Trump administration?”

To this, Rooney Vera responded: “Well, we’ve also heard it from Elizabeth Warren. She’s also been pretty attentive with regards to where she thinks the Fed could take rates. Ultimately, it’s a free country, you can say anything you want, the president can say anything he wants. The question is: Does the Fed feel the pressure to act upon that? And up until this point my answer would be no. I think the Fed has done an okay job. They’ve definitely kept rates too low for an extended period of time, aggravating the bubble that we see in the market now. So as a result, they took rates up to where they need to be.

“I think it’s time to start cutting rates. I think it makes sense, and I think it shows an independent Fed, that they’re able to do that without even assuming that pressure from the government. So, it’s always going to be there, on the Trump side, on the Elizibeth Warren side. We’re always going to get political talk with regards to where the interest rate should be. The question is does the Fed act on it. Likely we have a credible institution, and I think they’re doing the best thing for the economy: get inflation to a sustainable 2% average, with full employment.”

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