The Dow Jones and the broader U.S. stock market were in solid form in the first half of 2019 despite geopolitical tensions on several fronts. The Dow and the S&P 500 hit new highs a week ago thanks to the Federal Reserve’s dovish monetary policy outlook.
But former White House communications director Anthony “The Mooch” Scaramucci believes that the Fed doesn’t have reason to be dovish anymore.
In an interview with Fox Business, Scaramucci said:
“I don’t think the Fed can cut rates here, given how strong the economy is.”
Source: Yahoo Finance
The Mooch has a point
Famous for being the shortest White House communications director with an official tenure of just six days, Scaramucci is making a valid point about the Fed’s stance on interest rates.
The latest jobs data for June indicates that the state of the economy is strong. Nonfarm payrolls increased by 224,000 last month, blasting past the original expectation of 165,000 job additions. What’s more, wage growth came in at 3.1%, a hair lower than the 3.2% forecast.
Read more about the jobs numbers out today: https://t.co/RYxmJYJawi
— CEA (@WhiteHouseCEA) July 5, 2019
But the positive jobs report spells bad news for the stock market. The chart at the beginning clearly shows that the Dow has started trending lower, and the jobs report has added to the downward pressure by reducing the scope of a rate cut. Scaramucci added:
“If he cuts rates, it is going to be very, very good for the stock market, but I’m just worried that it may be too early to start that process,