The market is betting on a September rate cut, says Partners Group's Anastasia Amoroso

Interest Rate Expectations and Fed Policy - The market anticipates a September rate cut with approximately a 65% probability [5] - The Fed's potential rate cut is linked to successfully navigating tariff impacts and observing inflation reports [3][6][7] - Current interest rates at 45% (implied 45%) are considered above restrictive in real terms (approximately 2%), suggesting a potential need for a rate cut [3] - The Fed is expected to provide clarity on the conditions (what), timing (when), and reasons (why) for potential rate cuts, particularly concerning tariff impacts [5][6] - Market implied inflation expectations are rangebound and consumer inflation expectations have decreased from previous highs of 6% to 7%, potentially giving the Fed leeway to cut rates if these trends continue [7][8] Market Conditions and Investment Strategy - Short-term market exuberance is noted, with the market up 30% from April lows, leading to high valuations and overbought conditions in public markets [9] - Near-term, the current moment may not be the ideal buying opportunity, but long-term investors should consider earnings growth, margins, and valuations [10] - Private markets are exhibiting meaningfully lower valuations, higher margins, and higher earnings growth compared to public markets [11] Impact of Rate Cuts and Capital Markets - A rate cut would be welcomed, especially for private market participants, as rates have already decreased by about 1% [4] - Constructive capital markets are likely to drive an uptick in M&A activity, which has already rebounded in June [12]