Equity markets (^DJI, ^IXIC, ^GSPC) are trading mixed as investors digest the cooler-than-expected June Consumer Price Index (CPI) report. Lafayette College chief investment officer Krishna Memani joins Catalysts to discuss market outlooks and Federal Reserve expectations on the heels of this print.

Memani says that June's CPI data makes a September Federal Reserve rate cut highly likely, stating it's "in the bag." However, he cautiously notes the amount of time between now and September, with numerous reports that could alter the Fed's outlook and "put a little bit of a damper on things as we saw in the first quarter of this year." Despite the positive inflation news, Memani emphasizes that valuation concerns in the market persist.

Addressing labor market considerations in the Fed's rate cut decision, with some investors eyeing a potential July cut, Memani states: "The trend in the labor market has been quite consistent. It's been slowing down for a reasonably long period of time." He questions whether the timing — July versus September — would significantly impact the state of the economy, suggesting that "the Fed's judgment would be that it probably doesn't."

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This post was written by Angel Smith