With the stock market near record highs and the US economy churning away, some market participants are skeptical of the expected interest rate cut by the Federal Reserve.
"I'm baffled that we're going to lower interest rates in a market that's trading near all-time highs," Peter Tuchman, trader on the New York Stock Exchange, told CNN's Alison Kosik during the digital live show Markets Now today.
That said, stocks reached new records because of the anticipated rate cuts. Lower interest rates make it cheaper for companies to borrow and are thus good for stocks.
"Are we talking about cutting rates to stimulate the economy?" asked Phil Bak, chief executive officer at Exponential ETFs. Bak was equally skeptical that below-target inflation is the driver for rate cuts. After all, inflation in the United States has been low for years.
Returning to lower rates bears risks for asset valuations, Bak added. The market "has been up for ten years with very little volatility," he said. This could mean that investors are taking on too much risk.