Shane Solly: Harbour Asset Management expert on whether the US Federal Reserve will cut rates

New economic data impacting the US came out last week and it's got experts speculating over whether rate cuts will come.

Harbour Asset Management's Shane Solly explained further.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Shane Solely harbor Asset Management is with us. Hello Shane, Hello,
eav Okay, what do you reckon? Look at this this
economic data out last week? Do you think that we
get cuts in the US?

Speaker 3 (00:27):
Yeah? Look in the US we're on track here there
are business of inflation data out last week. Doesn't really
alter the head reserve rate cuts path, but it does
give them a bit more ammunition. The key points that
came out last week was this thing called the Personal
Consumption Expinger PCEE. That's the Fed's key inflation indicator. Watch
came out at zero point three for the month for June.

(00:48):
It's pretty much in line. And then we had a
Michigan consumercy You're going to go, who here is the
key thing was there? Importantly, they talked about inflation expectations
for the five to ten year dropping to three and
a half percent, again still high, but not as high
as it was. So this is sort of opening the
door for the FED to cut by zero point to
two five percent taken into four twenty five to four

(01:10):
point five. This Friday. However, Heather, we have the non
farm payrolls, but that would be really important as an
indicator as to how hard the FED goes.

Speaker 2 (01:19):
Now, what happened to the video share price on Friday?

Speaker 3 (01:22):
Yeah, interesting one. It was our three just out of
three percent, three point three percent, a little bit of
a soft result. Last week it was okay, not quite
as good as people wanted build. Really, what had it
was a news that Ali Barber, the Chinese tech company,
has developed a new chip. It's compatible with the videos platform. Indeed,
if the reports are right, then engineers can repurpose programs

(01:44):
they wrote for video chips for use with Ali Barber chips,
and then that means it's more competitive for this growing
demand for artificial intelligence. So, yeah, we saw the in
video share price. It's come off. It's all time high
one hundred and eighty three dollars US closed it one
hundred and seventy four dollars US down three point three percent,
still forty eight percent high than it was a year ago.
So a little way toga before we're going to have

(02:06):
to really get worried about it.

Speaker 2 (02:07):
Yeah too, right now, Chinese economic data came out in
the last few days as well. Looking at that, what
are you thinking about our economy?

Speaker 3 (02:14):
Well, the key thing was it was okay, It was okay,
suggesting overall that the broader purchasing manager in this is
the composite one purchasing manager in DIES is a lead.
Indicative economic activity was above fifty. It was at fifty
point five. It's about fifty. It means the economy is expanding.
But the devil was in the detail. The manufacturing part

(02:35):
of the purchasing managegacy that was a below fifty was
at forty nine point four and slip back, so it
means manufacturers not as positive on growing. That was the
non manufacturing part that was positive. So good for our
businesses that are perhaps providing services or things that are
consumed by you know, service parts of the Chinese economy

(02:56):
rather than manufacturer. But nonetheless kind of helpful.

Speaker 2 (02:58):
Yeah, good stuff, Shane. Always good to talk to you.
Talk to you next week, Shane, Sally Harbor, Asset Management.

Speaker 1 (03:03):
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