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Shelton Capital calls for a Fed pause as inflation cools
The firm said May was the likely inflation peak, citing easing energy and housing costs, while it kept its equity stance overweight.
Shelton Capital Management reviewed its mid year outlook and argued that U.S. economic growth is stronger than headline GDP figures, with private sector activity outpacing GDP drag from net exports, according to a piece syndicated by Yahoo Finance.
The firm said the labor market remains tight rather than broadly strong, suggesting worker scarcity should cool job growth while keeping unemployment low. It also flagged weak inflation adjusted income growth as the key risk, even as it noted inflation likely peaked in May.
On policy, Shelton Capital said current inflation levels support a pause by the U.S. Federal Reserve, but added that it is not enough to make it turn more cautious. It said corporate earnings are a bright spot, with 2026 S&P 500 Index earnings growth tracking above 24% and estimates being revised up.
In positioning, the firm said it remains overweight equities and emphasizes the U.S., with tilts that include health care services, industrials, regional banks, and AI infrastructure. In fixed income it favors high quality ABS and MBS, and in alternatives it continues multi asset real return and equity options overlay strategies, adding a healthcare service providers ETF across several growth and conservative model portfolios.
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