Fundstrat’s Tom Lee Says Stock Market Not in a Bubble, Predicts Fed Won’t Hesitate To Cut Rates – The Daily Hodl

The head of research at market intelligence firm FundStrat says the stock market most likely has more room to rise.

In a new interview with CNBC Television, FundStrat's Tom Lee says It is too early to say that the stock market is in a bubble, as there is still no consensus that it is not.

“I don't think we have a bubble until the consensus declares that there is no bubble and there is no risk and that is when we are probably in a bubble. But I think a lot of people raising the possibility that this is a bubble means it's still early.”

According to Lee, if the Federal Reserve does not reduce rates, it would pose a threat to the strength of the stock market. However, Lee says there is a higher-than-expected chance that we will see rate cuts as early as March.

“If the Fed doesn't cut, I think it would pose a pretty big risk to the stock market. I don't think the Fed is going to hesitate just because the stock market is up...

The Fed's policy rate, close to 5.5%, is the highest policy rate in the world for any developed country... I think the bond market itself is telling us that the Fed is too restrictive in this moment...

I think the likelihood of cuts in March is higher than what is being priced in and a lot will depend on how the February CPI (consumer price index) looks, due out on March 12, but we think there are some anomalies in the consumer price index for January. CPI, including a poor seasonal adjustment...

If they start showing improvement, I think whatever the elevated CPI we saw in January, the price revision will be largely reversed.”

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