In the world of investing, interest rates play a crucial role in shaping the market. The upcoming Federal Open Market Committee meeting on Sept. 16-17 has investors on edge after Chair Jerome Powell’s speech in Jackson Hole hinted at a potential rate cut. The question of Fed independence adds to the anticipation.

The impact of the Fed and interest rates may be overstated in certain investment areas. Bond prices, the housing market, the dollar, small-cap stocks, dividend-paying stocks, growth stocks, and emerging-market assets all have complex dynamics that go beyond simple interest rate movements. The market is influenced by a multitude of factors, making predictions challenging.

Interest rates can be difficult to predict, as seen in 2024 when the market expected multiple rate cuts that didn’t materialize. While rates do matter, investment performance is influenced by a wide range of variables. Making investment decisions based solely on interest rate forecasts may not always yield the expected results.

Read more at Morningstar: 7 Reasons to Stop Freaking Out Over the US Fed