Fed Won't Cut Unless Growth Weakens: Economist Darda

The transcript discusses the current market pricing, which includes both soft and no landing scenarios. It highlights that Fed rate cuts are unlikely unless there is significant economic weakness. The Fed's reaction function is not aligned with a soft landing, and it will continue tightening until the economy weakens. Investors should be cautious as the S&P 500 reflects a soft landing scenario, which the Fed may not support.

What are the two scenarios currently being priced into the market?

• Soft landing and no landing

• Hard landing and soft landing

• No landing and hard landing

• Recession and recovery

Under what condition might the Fed consider cutting rates?

• If unemployment is low

• If inflation is high

• If economic growth is strong

• If the economy is significantly weaker

What does the Fed need to see before it considers relenting on rate cuts?

• Stronger GDP growth

• More economic weakness

• Higher employment rates

• Increased inflation

What is the Fed's reaction function not aligned with?

• A rapid recovery

• A no landing

• A soft landing

• A hard landing

Why should investors be cautious according to the final section?

• The Fed is likely to cut rates soon

• The market is overvalued

• Earnings estimates are rising

• The Fed may not allow a soft landing scenario