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The Federal Reserve initiated its rate-cutting cycle aggressively in September with a 50 basis point cut. As a potential November cut approaches, investors are leaning towards another 50 basis point reduction. To offer insights into this development, Morgan Stanley Investment Management Senior Fixed Income Portfolio Manager Michael Kushma joins Market Domination.

Kushma notes that the Fed remains data-dependent, and recent data has continued to "move their way," with inflation cooling and unemployment still slightly elevated. He believes the Fed currently has the "freedom" to cut rates by at least another 50 basis points this year "just to get policy less restrictive."

Regarding investment strategies, particularly within bonds, Kushma suggests that significant price appreciation is unlikely as rates continue to decrease. "There's a lot of rate cuts discounted in the market today," he told Yahoo Finance, noting that with numerous rate cuts already priced into the market, investors are now questioning the extent of these cuts.

"I think the ten-year yield is gonna be trapped in a range called 3.5-4% for now, with waiting to see does the economy really slow down into recessionary conditions?" he told Yahoo Finance, advising that individuals shouldn't "expect big gains" at this point in time.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Angel Smith