CNBC Television · Sep 24, 2026
With Tom Lee, Co-Founder and Head of Research at Fundstrat Global Advisors
A new way of measuring PCE inflation, the Fed's preferred price gauge, is due on September 30, and Tom Lee said it will probably take 20 to 40 basis points off the year-over-year rate.
The anchor pointed out that the Fed's own forecasts do not show inflation back at target for months. Lee said the odds favor much lower inflation within 6 months, driven by policy already in place, not by last week's rate hike.
"And I think that means the Fed could actually walk back some of that hawkishness."
Tom Lee, co-founder and head of research at Fundstrat Global Advisors and J.P. Morgan's chief equity strategist from 2007 to 2014, was brought in as a CNBC contributor to react to two guests on set.
The full segment is covered here so you can skip it.
Here are the 5 predictions that matter.
Key Takeaways
Where inflation is in 6 months decides where rates go, and he thinks it will be much lower
Rising yields help the strongest companies, which is probably why the Magnificent Seven are rising
A new PCE methodology on September 30 could cut the inflation rate, along with fading tariff, memory and portfolio-fee effects
Oil would have to move toward $150 for energy to push inflation up from here
Memory chip prices should not be the reason the Fed hikes, because they barely touch the average household
1. Yields Compete With Stocks
An anchor asked Lee what he made of the two guests on set.
He agreed with both sides
"I mean I actually think both perspectives make sense." — Tom Lee
"You know yields have risen to a level that are competing with stocks." — Tom Lee
He said the market is still trying to work out why yields are higher, and that there are several reasons. Two things are missing from the discussion, he said. The first:
"Number one is where will rates be in 6 months because where will inflation be?" — Tom Lee
