Jefferies’ Zervos, Touted for Fed Chair, Calls for 50-bp Cut

Jefferies chief market strategist David Zervos, who has emerged as a candidate to succeed Jerome Powell when the Federal Reserve chair’s term expires next year, told CNBC he favors an immediate 50-basis-point cut in the federal funds rate. Zervos argued the current 4.33% policy rate is overly restrictive and said easing now would head off a potential labor-market slowdown and could even generate an additional one million jobs despite a hotter-than-expected July Producer Price Index. Zervos joins other prominent market voices pressing for swifter monetary easing. BlackRock bond chief Rick Rieder called the present backdrop “the best investing environment ever” but said the Fed must begin cutting rates soon to sustain momentum. Separately, Yardeni Research president Ed Yardeni predicted the S&P 500 could surge to 7,000 by year-end in a ‘melt-up’ if the central bank delivers a larger-than-usual cut.