Mr Market’s reaction on rate cuts
Sep 17, 2024
It seems the key question is no longer whether the Fed will cut interest rates this Wednesday, but by how much—either 25 or 50 basis points. Historically, the U.S. stock market has responded positively to the first rate cut, often posting double-digit gains in the following 12 months. However, there are two notable exceptions: 2001 and 2007, when rate cuts coincided with the onset of recessions. Despite some softer economic data, there is currently no strong indication that the U.S. economy is heading into a recession this time around.
