Martin: Bull Run Will Last Beyond Interest Rate Hikes, Energy & Consumer Staples Strong

SPEAKER_1 (0:00)

Welcome back to Opening Bell. Focusing on the Fed here, 2 p.m. Eastern Time. We'll get the Fed decision, and then we'll hear from Kevin Marsh himself at 2:30 p.m. Scott Martin, Partner and Wealth Manager at Kingsview Wealth Management is with me now. Of course, most of Wall Street expecting a hike today. Could he do the hold and surprise Wall Street? That's another question that people are circulating. Some of your thoughts this morning.

Scott Martin (0:23)

I think that's a fair call, Nicole. Something that I plead for Mr. Warsh to do, because I'll tell you what, I think one of the issues that the market has right now is this anticipation. You're talking about that with Diane earlier, is we're seeing downgrades. We're seeing a lot of things come out from the major brokerage houses, Nicole, that are starting to be maybe part of that, let's not say panic, but part of the worry that's gonna be coming with an interest rate hike today if it does happen. I particularly think the market's doing the work for the Fed. If you look at the treasury curve itself, Nicole steepening along the route to the higher maturities, and also the fact too, that low interest rates are not necessarily that low. I mean, let's face it, given where inflation numbers are, given where growth numbers are, given even where employment data is, Nicole, all these things we look at very explicitly, there's not necessarily this pressuring need to hike rates. I think what Warch could do today is he could throw one hike in today and say, hey, we're gonna wait for data in the future, and that would be something the market could take okay. But the big move would be to wait one more, say, period of data to see if they could hold off. But I think given the fact that other central banks around the world are hiking, given the fact that the 10-year note has been steepening, I think Warch feels like he's gonna fall into line and hike short-term rates as well.

SPEAKER_1 (1:34)

Are you in the camp that we're in a long-term bull market, and if we have volatility today or tomorrow, so be it?

Scott Martin (1:43)

Yes, I love that camp. That's a camp I would go camp at anytime I could get the space. But the reality is the market tends to, I think, look at things very short-term, and long-term, sure, I think things will likely be okay, potentially, as long as the Fed and say, the government spending plans are relatively under wraps, or at least known. I think the issue though, Nicole, that the market does have today is we have other things going on. I mean, you talked about the geopolitical concerns, we talked about some of the housing concerns now, of course, that have been present all along, say, this recovery. Now, we're going to be probably more challenged, or at least more hailed in the media because the fact that rates are higher.

Let's face it too, we have a lot of issues too coming up with the November election, in my opinion, they're going to say, opposition the economy going forward here in the end of the Trump term. So there's some other things the market could start to take a look at, besides worse's move today, that could say have an impact on equity prices.

SPEAKER_1 (2:34)

You know, there are some folks that it could be a bullish scenario if the hike is accompanied by the signal that they're just unwinding the 75 basis points of easing that was delivered in 2025

Could that help? What do you think?

Scott Martin (2:49)

Well, it helps and hurts, if I could say, because here's why. One is, we're trying to get this new Fed in place, right, Nicole? And the issue with that would be, we need a new Fed, and we frankly need a new government in a way that will be out of the way of the market, so to speak. I mean, the market will do best, and the economy will do best when the economy and markets can be themselves by themselves. Now, when you have the Fed coming in and say, hey, we're not really that hawkish, but we want to undo some of the things that Jerome Powell and company have done. When the government comes in and tries to say, hey, we're going to buy all these treasuries, we're going to give people money and things like that. Those are very, very artificial and kind of subordinate type of things that the market may like at first, but I think overall, Nicole, that is your concern longer term for what we're dealing with here as far as a couple entities. So if the powers that be can let the market kind of enhance or de-enhance, let's say, some of the things that are going on out there, I think that's where the market will perform best. And like I said, the market has already done a lot of the Fed's work. I mean, my goodness, when we talked to Nicole a couple of months ago, the 10-year treasury rate was at about what?