TomLee: If the Federal Reserve cuts interest rates only once, the market will remain strong

Tom Lee, co-founder of Fundstrat, said that while the market was still pricing in two more rate cuts this year, just one cut was not necessarily a bearish signal. If the Fed decided to cut rates only once before the end of 2025, "the market would interpret this move in a positive light because they would prefer to see central banks cut rates when the economy is strong rather than weak," Mr. Lee said. Market participants have trimmed their expectations for quarterly rate cuts after Thursday's announcement of lower-than-expected initial jobless claims. Mr. Lee adds: "We know the Fed is lagging behind on easing because of estimated housing inflation, but the reality is they should have started cutting rates earlier... so we have to be cautious. When the Fed talks about this estimation effect, it doesn't mean we need to start a new rate hike cycle just because the data shows a time lag. I think that's why the market sees the essence." (Kim 10)