From Morningstar.: 2024-09-12 13:14:00

The Federal Reserve is expected to cut interest rates for the first time since the pandemic began, with the potential for a quarter to half a percentage point reduction. Market reactions will shape the impact of the rate cut across various sectors.

Stocks historically perform well after rate cuts, but market performance can vary widely. The Fed’s reasoning behind the rate cut is crucial for predicting how markets will react in the coming year, with earnings growth and other economic indicators providing valuable insights.

Investors should prepare for potential market volatility as the Fed begins its cutting cycle. Uncertainty around economic growth and inflation levels can lead to fluctuations in stock prices. Positioning portfolios with a mix of defensive stocks, REITs, and smaller-cap stocks can help navigate potential market scenarios.



Read more at Morningstar.: What Happens to US Stocks When the Fed Starts…