How Will Rate Cuts Impact StocksHistorical Performance of Stocks...

How Will Rate Cuts Impact Stocks

Historical Performance of Stocks During the Fed’s Rate Cuts

"During the last nine times, the Federal Reserve paused raising interest rates and then proceeded with rate cuts, the transitional pause period usually witnessed a spike in stock prices. Interestingly, though, once the actual rate cuts started, the market wasn’t kind to investors."

"On average, following the commencement of interest rate cuts, the stock market has experienced a 23% decline in value."

Why Do Interest Rate Cuts Affect Stocks Negatively?

"When the Fed cuts interest rates, it often attempts to counter an economic slowdown or prevent a recession. In these situations, the underlying economic conditions may outweigh any potential benefits of lower interest rates."