As the Federal Reserve gears up for its first interest rate cut at its September meeting, traders are split between whether it will be a 25- or 50-basis-point cut. Annandale Capital founder and chairman George Seay joins Catalysts to discuss the Fed's rate cut path ahead and how investors can best position their portfolios for easing rates.

While Seay would like to see a 50-basis-point cut, he believes the Fed will opt for 25 because "they're very cautious and they're very much incremental in the way they go about things." However, he believes that the Fed is "behind the curve" as the economy has been cooling significantly.

He notes that the Fed has been "very slow" to unwind its strong interest rate hikes and argues that "the economy is going to keel over at some point in the next two years." He explains that the Fed moves too slowly as it errs on the side of caution when it comes to tackling inflation.

With this economic outlook, Seay expects banks and financial companies to "benefit dramatically" from lower interest rates over the next year and a half. He adds, "I would be hesitant to go into stocks that are really dependent on significant growth in the economy and all that, because I think the economy is going to slow dramatically. So I would go into interest-sensitive stocks currently."

Seay also sees the tech trade as "long in the tooth," believing that the overall trend is "pretty much over." He encourages investors to be "really cautious" on the sector despite its rally in Wednesday's trading day.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Melanie Riehl