Expect 3 rate cuts from the Fed this year, says Wilmington Trust's Meghan Shue

• Q4 earnings have been good, but high market optimism means any slight disappointment could lead to share price falls.
• Wilmington Trust is more pessimistic on the economy than the street, forecasting 1% GDP growth for 2026 due to cracks in the labor market (e.g., negative private job growth ex-healthcare).
• Factors like reduced immigration, marginal AI impact, and lingering tariff/geopolitical risks are weighing on confidence and capital expenditure.
• The Fed is expected to deliver three rate cuts this year, as inflation is not a primary concern.
• Despite economic caution, Wilmington Trust is fully invested in equities, expecting high single-digit S&P 500 returns this year, driven by projected 15% earnings growth.

Meghan Shue of Wilmington Trust discusses a mixed economic outlook, noting strong earnings but underlying labor market cracks and muted capital expenditure outside of tech. Despite these concerns, she anticipates three Fed rate cuts this year and recommends being fully invested in equities, projecting high single-digit S&P 500 returns driven by earnings growth.