Federal Reserve celebrates one year without rate hikes, but analysts warn against potential rate cuts

From Investing.com: 2024-07-29 06:42:05

The Federal Reserve celebrates one year without rate hikes, but Strategas analysts warn against optimism for potential rate cuts. Market performance tends to improve before the first rate cut rather than after. Mixed economic signals regarding consumers’ health are concerning, with Fed Chair Powell leaning towards easing despite warnings of economic and market stress. Historically, markets drop 23% and operating earnings decline 10% after a series of rate cuts. While the Fed has guided a smooth transition, analysts caution against a hasty easing of monetary policy. With President Biden’s decision not to seek reelection affecting economic stimulus plans, analysts advise careful consideration of the implications of rate cuts on the economy and markets.



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