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 (00:00):
Shane solely harbor asset management is with us.

Speaker 2 (00:02):
Hello Shane, Hello Heather.

Speaker 1 (00:03):
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 (00:10):
Yeah? Look in the US, we're on track here, there
are business Some 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 PC. That's the Fed's key inflation indicator. Watch
came out at zero point three for the month for June.

(00:32):
It's pretty much in line. And then we had a
Michigan consumer syre. You're going to go who he is?
The key thing was there? Importantly, they talked about inflation
expectations for the five to ten years dropping to three
and a half percent.

Speaker 2 (00:43):
Again still high, but not as high as it was.

Speaker 3 (00:45):
So this is sort of opening the door for the
Fed to cut by zero point to two five of
dissent taken into four twenty five to four point five
this Friday. However, Heather, we have the non farm payrolls
number that would be really important as an indicat as
to how hard the FED goes.

Speaker 1 (01:02):
Now, what happened to the video share price on Friday?

Speaker 2 (01:06):
Yeah, interesting one. It was three just out of three percent,
three point three percent, a little bit of.

Speaker 3 (01:11):
A soft result. Last week it was okay, not quite
as good as people wanted to 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. Indead,
if the reports are right, then engineers can repurpose programs
they wrote for video chips for use with Ali Barber chips,
and then that means it's more competitive.

Speaker 2 (01:32):
For this growing demand for artificial intelligence. So yeah, we
saw the in video share price. It's come off.

Speaker 3 (01:38):
It's all time high of 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.

Speaker 2 (01:46):
High than it was a year ago. So a little
way to go before we're going to have to really
get worried about it.

Speaker 1 (01:50):
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 (01:57):
Well, the key thing was it was okay, okay, suggesting
overall that the broader purchasing manager and this is the
composite one purchasing manager of this is is a lead
indicative of economic activity, was above fifty. It was at
fifty point five. It's above fifty. It means the economy expanding.
But the devil was in the detail, the manufacturing part

(02:18):
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.

Speaker 2 (02:28):
That was the non manufacturing part that was positive.

Speaker 3 (02:30):
So good for our businesses that are perhaps providing services
or things that are consumed by you know, service parts
of the Chinese economy rather manufacturer.

Speaker 2 (02:40):
But nonetheless kind of helpful.

Speaker 1 (02:42):
Yeah, good stuff, Shane. Always good to talk to you.
Talk to you next week, Shane, Sally Harbor, Asset Management.

Speaker 3 (02:46):
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