The Fed needs to be wary of fanning flames of cut expectations, says Roth Capital's Michael Darda

Interest Rate Policy - Roth Capital Partners' chief economist believes a 25 basis point rate cut in September is fully priced in [1] - A year ago, there was a stronger case for rate cuts due to rising unemployment and lower inflation expectations (50 basis points lower at the 5-year horizon) [2] - The Fed needs to be wary of fueling expectations for over 100 basis points of cuts in the next year [3] Economic Outlook - Q3 macro data appears okay, with consumer spending and real GDP growth both tracking above 2% [4] - Q3 inflation, measured by the GDP price deflator, is running just below 3%, resulting in approximately 5% nominal growth [5] - The Fed Chair is expected to be tight-lipped and emphasize data dependency [5]