Michael Darda, chief economist at MKM Partners, told CNBC’s “Morning Call” that he doesn’t expect the Federal Reserve to cut interest rates anytime soon despite weakness in the latest economic report.
First-quarter gross domestic product rose an estimated 1.3%, less than the expected annual rate of 1.8%, the government reported Friday.
“If you just take a look at this (economic) report, certainly it was weak,” Darda said. “But consumption, which is 70% of the U.S. economy, grew at almost a 4% rate in real terms. Inflation on a quarterly basis, was the highest rate in 16 years. So, to assume the Federal Reserve is going to cut rates based on this data, I think is wrong. If you look at sensitive financial indicators, they’re pointing to an upturn in growth later in the year. So, I think rate cut fantasies are just that.”