A slew of retailers will report their quarterly results this week, including Walmart (WMT), Home Depot (HD), and Target (TGT). eToro USA Investment Analyst Callie Cox and J.P. Morgan Global Wealth Management Investment Strategist Elyse Ausenbaugh joined Yahoo Finance Live to discuss what these results could tell the Federal Reserve about the consumer and inflation. Ausenbaugh notes that consumer are starting to shift their spending from services back to goods, saying it will be "an interesting dynamic to watch, both in respect to company earnings but also the inflation picture."
As for the Fed, Cox says "a September rate hike is definitely in play," but that "the data we've seen might keep the Fed higher for longer, longer than investors expect." However, Cox also notes that at its last meeting, the Fed said it would consider loosening its policy back to the neutral rate, if inflation falls enough. Ausenbaugh says that Fed Chairman Jerome Powell "has been emphasizing that, at this point, the real fed funds rate is in restrictive territory." "Inflation keeps coming down, that's going to continue to get more restrictive and it's the basis for why we think the Fed is actually probably done hiking rates at this point," Ausenbaugh said.
