Tom Lee: If the Fed cuts interest rates only once this year, the market will remain strong

Fundstrat co-founder Tom Lee said that while the market is still pricing in two more Fed rate cuts this year, only one wouldn't necessarily be a bearish sign. If the Fed decides to cut just once by the end of 2025, "the market would interpret that positively, as they prefer to see a central bank cut when the economy is strong rather than weak," Lee said. Following Thursday's weaker-than-expected initial jobless claims, market participants have slightly lowered their expectations for the Fed's quarterly rate cuts. Lee added, "We know the Fed has been lagging in easing policy due to estimated housing inflation, but the reality is they should have started cutting rates sooner... So we have to be cautious. When the Fed discusses this estimated effect, it doesn't mean we need to start a new rate hike cycle simply because the data is lagging. I think that's why the market sees things clearly." (Jinshi)