Josh Brown: Fed Decision Is a 'Very Big No-Big-Deal'

News February 01, 2024 at 02:41 PM

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Delaying the first interest rate cut from March to May is no big deal, Brown said.

Ritholtz Wealth Management CEO Josh Brown didn't appear concerned about the economy or the stock market Wednesday after Federal Reserve Chair Jerome Powell signaled the central bank likely wouldn't start cutting interest rates in March.

Shortly after DoubleLine Capital CEO Jeffrey Gundlach reiterated his forecast for a recession this year, Brown appeared on CNBC's "Closing Bell" and cast doubt on that outlook.

From November until the market slide after Powell's comments Wednesday afternoon, "we had one of the best three-month periods in the history of the stock market. We did plus-19% and quite frankly we've done that less than 20 times over the last hundred years," Brown said.

"The problem for the recession case is that on 16 of those 17 occasions not only did you not have stocks lower but you had no recession and in fact the market was up an average of over 30 (percent) one year later. So I would have to hear the case for why this time would be different," he added.

"If you think we had this $5 trillion rally in the stock market over the course of 90 days over absolutely nothing, that's a really interesting story because that says to me everyone's wrong and the last people still calling for a recession are right. They might be but there's very little evidence. Everyone is working, people's bills are being paid, the market seems fine, the economy seems fine," Brown said.

The situation could change, and if the Fed, which is holding steady on interest rates for now, instead raised them again to fight inflation, "everyone would be singing a different tune. That's not what we're talking about. We're we're talking about the first cut moving from March to May. To me it's a very big no-big-deal."

Despite the down market Wednesday, Brown noted stocks could climb again on Thursday, which they did. The Dow Jones Industrial Average was up about 190 points around 12:30 p.m. Eastern time.

Photo courtesy of Josh Brown

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