Selloff in stocks was ‘overdone’ after CPI, but don’t rule out more volatility, strategist says

Selloff in stocks was ‘overdone’ after CPI, but don’t rule out more volatility, strategist says

Engelke said waning liquidity in both stocks and bonds, as well as big market reactions over the past few years to incoming economic data, were likely culprits, without an easy fix.

“You are having very intense volatility, in a very narrow band,” Engelke told MarketWatch. “I think it’s more of the same.”

He also thinks traders still have too high of expectations for rate cuts this year. “I don’t think the Fed is going to lower more than 50 basis points this year,” he said. The odds on Thursday favored 100 basis points of cuts through year’s end, according to the CME FedWatch tool.