The Fed is going to hold out on rate cuts longer than we think, investment strategist says

• The Fed is going to hold out on rate cuts longer than we think, a John Hancock strategist said.
• Consumer spending and market momentum are strong, while elevated rates haven't created meaningful cracks in the economy.
• "We're seeing riskier areas like crypto-related stocks and AI darlings' momentum taking hold in the market."

There are two forces playing tug-of-war with the US economy right now.

On one side, there's the elevated interest rates that have made borrowing money a lot more expensive. On the other side is momentum — the hype that's been pushing up the stock market and the cash that keeps flowing out of consumers' wallets.

Right now momentum is winning, which means rates will remain right where they are for a while longer.