Don't expect inflation to come down to target in 2024, says Nuveen's Saira Malik

Joining us now to talk to markets, Sarah Malik, Chief Investment Officer at AT Nuveen. Feeling like like a fable, like a Goldilocks thing. So that was a 175 was not as as many jobs as as maybe we would hope for or expected, but it’s still solid and it’s not not too hot. It’s good to see you Joe. This is one data point, but it’s one data point in the right direction. And in the short term it’s going to add to this relief rally that we’re already seeing from a less hawkish Fed and strong earnings. the Fed came in this week and took the worst case off the table. They said rate hikes were unlikely and first quarter earnings have been strong. About 80% of companies have beaten consensus this quarter. Short term this is positive. Long term we still have concerns over weaker manufacturing data and inflation which did re accelerate this year. When the Fed takes hikes off the table, can we? It’s nice to hear that. But we’ve also heard some other things recently that maybe weren’t quite as true, didn’t turn out to be quite as true as we thought at the time. And I and I want to believe it too, but you think the chances are zero that we that the next move is higher. You know I don’t think there’s zero. I would not go as far as to take rate hikes off the table. We learned this year that while inflation had moderated in late 2023, it re accelerated this year. Sure, wage inflation looks better today, but CPIPPIPCE are all well above the Fed’s target and the economy has remained relatively strong. So if this sign of lower payrolls and some of the weaker manufacturing data that we’ve seen this week. Doesn’t hold. The economy stays very resilient and even reaccelerates from here. I think rate hikes come back to the table. We’ve been in the camp of less than three rate cuts this year with some chance of rate hikes. I think that’s still out there. We got about 30 seconds for you, Sir, but do you think that inflation could come down even if unemployment doesn’t go up? I think you need both for that to happen. I also don’t think inflation is going to come down to target in 2024. That’s a 2025 game, which is why we’ve not been predicting many cuts this year. And if employment does stay strong and the consumer keeps spending, those rate hikes could still be back on the table for the Fed. Yeah, or at least maybe. We hear it a lot higher for longer. We’re going to stay here for a while.