Today we check in with Fidelity’s director of Quantitative Market Strategy, Denise Chisholm, to discuss all things ranging from the fed pause and the risks of future rate hike shocks, to what she is seeing in today’s market makeup, and which sectors are coming out on top through this time of relative uncertainty. Denise explains that, while the pause was a consensus decision from the Fed, there is still the possibility of future rate hikes due to concerns about inflation. However, looking at the data, she is seeing a much more modest picture of inflation than the Fed’s actions might suggest, and no strong correlation between rate hikes and recessions. The focus should instead be on potential shocks to the consumer.  Denise also takes a look at the actions of central banks globally, and addresses concerns about the possibility of policy mistakes, and raising rates too quickly. She highlights historical patterns and suggests that while the timing of a recession is uncertain, the most important thing for investors during this time is to focus on market lows and the ability of stocks to overcome pessimistic sentiments.

Recorded on June 20, 2023.

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