The Federal Reserve implemented a 25 basis point interest rate cut on Wednesday afternoon, causing stock markets (^DJI, ^IXIC, ^GSPC) to fall. Michael Darda, chief economist and macro strategist at Roth Capital Partners, joins Market Domination to provide insight into the central bank’s decision.

Darda says the rate cut was “expected” but points out that the updated dot plot forecasts contained a hawkish tone. He expects a “several month pause” in interest rate cuts, pointing to Federal Reserve Chair Powell’s indications that the economy is outperforming initial expectations in September.

“What’s really strange about the current situation is… the job market is cooling down,” Darda explains. He emphasizes that private employment growth is “only half of what it was before the pandemic” and that the unemployment rate showed early signals of recession by “rising” over the summer.

Still, Darda notes that overall economic growth remains robust, with fourth-quarter GDP estimates at around 3%. “People look at this, and they look at the stock market… and they kind of scratch their head and think, ‘What’s the sense of urgency here? Why is the Fed making 100 basis point cuts when everything seems fine?’ ?’” Darda tells Yahoo Finance.

For more expert insights and analysis on the latest market activity, check out Market Domination here.

This post was written by Angel Smith