If the Fed keeps rates higher for longer they risk moving into a recession: Hennion & Walsh CIO

Federal Reserve Governor Christopher Waller said today that he favors holding interest rates higher for longer and needs to see several more months of favorable inflation data before pursuing rate cuts. Hennion & Walsh chief investment officer Kevin Mahn joins Market Domination to discuss the Fed's next moves and three signs of an economic recession.
"I think the Fed needs to be careful because if they keep rates too high for too long, they risk their own forecasted economic slowdown moving into a recessionary period," Mahn says. He points to several warning signs of a recession: first quarter GDP growth slowing to 1.6%, consumer sentiment slumping to its lowest level since July 2022, increasing unemployment, and an overleveraged consumer slowing down spending.
As for the future of the market (^DJI,^GSPC, ^IXIC), Mahn believes it got "a little bit ahead of itself thus far this year, pricing in the perfect execution of a soft landing by the Federal Reserve, and we're clearly not there yet." However, he says that when the first rate cut happens, stocks and bonds will both face a tailwind.
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