Prominent analyst and Fundstrat managing partner Tom Lee believes the US stock market is gearing up for another huge upside burst.
In a new CNBC interview, Lee says conditions are now ripe for the Federal Reserve to start cutting rates after the Bureau of Labor Statistics (BLS) revised down the job growth figures for June from 147,000 to 14,000.
-->“I think the data is just catching up to what we already know. The labor market has been soft, so I think it’s a positive setup because now the Fed has more ammunition to make a dovish pivot in the fall, and it’s not too late because we know the thing that they’re going to stimulate is the housing market…
So that is what strengthens the economy in 2026. So I think it’s quite a positive setup, we’re just consolidating, and then we make a bigger move higher.”
According to Lee, the Fed now needs to shift its focus from inflation to unemployment amid the softness in the labor market. He also notes that if the Fed removes housing market data from its calculations, inflation would be below 2.
“I think when they look at their dual mandate, they’re probably drifting further from the employment metric now because the unemployment rate, if you use the existing participation rate before the [recent] report, it’s almost 5 now.
So the Fed now has to be considering the risk of the jobs market going into a cycle of weakening.”
