STORY: U.S. stocks wavered on Tuesday (Feb. 27), with investors focused on Thursday's January personal consumption expenditures price index (PCE), the Fed's preferred inflation gauge.
Should the PCE reading resemble recent inflation readings on consumer and producer prices - which Mahn believes it will - it could compel the Fed to hold rates at current levels for longer than the market is anticipating.
Speaking with Reuters Lisa Bernhard, Mahn said that the Fed's own forecast of rate cuts over the next couple of years shows that the central bank doesn't expect the annual inflation rate to come down to its 2% target until the end of 2026.
"So that tells me they're much more comfortable with inflation staying above 2% - albeit below 3% as well - than they are with their own forecasted economic slowdown dipping into a recessionary period."
Mahn also discussed why Nvidia - despite another blowout quarter and skyrocketing share price - is not the only game in town when it comes to companies poised to reap profits from artificial intelligence.
"I believe investors would be wise to consider the entire ecosystem that surrounds artificial intelligence that's going to help them to continue to evolve. Those areas include hardware, software and even the data center in addition to the semiconductors and the chips."
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