"Fed rate cuts and AI productivity improvements are favorable for risk assets"

JH Kim

Summary

Shannon Saccocia, CIO of Neuberger Berman, said that the combination of Fed rate cuts and AI-based productivity improvements could be an upward driver for risk assets.
He said that if the Fed shifts to an easing stance in a non-recessionary situation, the stock market tends to show resilient behavior.
However, he said investors should remain cautious considering uncertainties such as market volatility and the possibility of a U.S. federal government shutdown.

According to the economic news channel Walter Bloomberg on the 9th (local time), Shannon Saccocia (Shannon Saccocia), Chief Investment Officer (CIO) of Neuberger Berman (Neuberger Berman), said that with expected interest rate cuts by the Federal Reserve (Fed), combined with AI-based productivity improvements, there could be upward momentum for risk assets such as stocks.

He explained that typically, when the Fed shifts to an easing stance in a non-recessionary phase, the stock market tends to show resilient behavior. However, he left open the possibility of increased market volatility, and added that since uncertainty factors such as the possibility of a U.S. federal government shutdown (work stoppage) remain, investors need to remain cautious.