Chuck Lieberman, partner and CIO at Advisors Capital Management joins Cheddar News to discuss the markets. 

Stocks Rise Ahead of Fed Meeting 

joining us now with much more on moving the markets this morning is chuck Lieberman partner and chief investment officer at advisors Capital Management chuck. Thank you so much for joining us this morning. What's the market pricing in ahead of the Fed meeting? And what will investors be listening for when the Fed announces rates and releases its statement this afternoon? Well, I think we're gonna care a lot more about the statement than the Fed action. Everyone expects 75 basis points. There's a small risk that they could go buy 100 but no one really expects that. But what the Fed says about policy is going to matter a lot. Will they signal many more increases? How much further do they do they have to go? Those are questions that are weighing on people's mind. And and of course, the Fed, as usual, will not be able to reveal what it plans to do. Speaking of those comments. What do you think investors want to hear today from Fed chair Jerome Powell? And do you think he's actually gonna come off as hawkish in his statement? I think he has to come somewhat hawkish. I think the Fed, uh, has got to maintain that they're going to continue to raise rates until they contain inflation. And the market is hoping that there's gonna be some sort of indication that they're closer to the end of the line of the rate hikes. Anything like that would set off a massive rally I think. But that's precisely why the Fed can't do that. If it indicated that they were pretty much done with rate heights and the market would rally, that would actually ease financial market conditions. So I think the Fed has got to stay hawkish now. To your point, the Fed has been delivering a tough love message on inflation here. So what are you expecting to hear on that front in the Fed statement today? Well, I think Powell is going to indicate that he's very committed to containing inflation. Um there was a story in the Wall Street Journal yesterday suggesting that he had a speech all written for Jackson hole and threw it away and rewrote the speech because the market misinterpreted what the Fed had done in july. They were optimistic or too optimistic that the Fed was nearly done with raising rates. The pal did not want the market to maintain that view. And so he came right out and said, The Fed is going to have to raise rates to contain inflation in its unambiguous and in his hawkish away, as you can imagine, of course, a lot at stake today. But after the decision in these comments today, what do you expect investors are going to turn their attention to next? Well, the key variables are of course inflation in coming months, but also the behavior of the labor market. The labor market is the critical one. In my judgment, There's no doubt that labor is scarce and that's putting upward pressure on wage rates. And that is more important than all of the other stuff that the market looks at, like commodity prices, car prices, airline, fares, you add up all that stuff and wages matter much more than all commodities put together. So that's what really matters. But in both cases, we're gonna see some numbers that look a little better from the market's perspective. And I think the market is going to misinterpret them, uh, inflation has transitory components. Those are coming out of the data. The underlying trends are not favorable, but the market will probably look at the improvement in inflation. And then in the labor market hiring is running 400,000 a month. We only have about 5.5 million unemployed. We have over 11 million job openings. So the labor market is very tight and hiring is gonna slow down only because we're running out of people to hire and the market will probably misinterpret that as a slowdown in the economy. So I think there's room for the market to rally. But for the wrong reasons. Now, companies like Ford and Fedex have been giving us a bit of a peek into how the economy is impacting companies as we head into earning season here. What are you expecting? Do you think? We could see other companies facing similar pressures? Well, it's a mixed bag in terms of earnings reports because both ford and Fedex are seen as a little bit of an outlier. Especially Fedex. Uh, competitors are not having as much difficulty in the case of the auto companies. They clearly have problems with assembling cars because of part availability. But that is an indication that demand again is outstripping supply. And as supply comes back online, as chips become available to the car manufacturers, they'll be able to increase production and we'll see a pickup in sales in that, in that sector chuck. Thank you so much for joining us this morning. That's chuck. Lieberman, partner and chief investment officer at Advisors Capital Management. Thanks again.