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

Summary

Meghan Shue of Wilmington Trust says she remains fully invested in equities even though she is more cautious than the Street on the economy, forecasting about 1% GDP growth in 2026 and pointing to cracks in the labor market. She expects three Fed rate cuts this year, more than the market expects, and says inflation is not a primary concern. She sees solid earnings and high single-digit equity returns this year, but warns extended valuations leave little room for disappointing guidance and that consumer spending may be hard to sustain.

• Meghan Shue, Wilmington Trust chief investment strategist, joins Squawk Box.
• She remains fully invested in equities and expects high single-digit returns this year.
• She forecasts about 1% GDP for 2026 and says private job growth excluding health care is negative.
• She expects the Fed to cut rates three times this year, more than market expectations.
• She says Q4 earnings were solid but guidance was slightly disappointing.
• She warns extended valuations can punish companies that fail to beat expectations.
• She sees consumer spending as at risk because it is outpacing income growth.
• She says tariffs and geopolitical uncertainty weigh on confidence and non-tech capex.