From CNBC.: 2024-08-23 15:57:36

Federal Reserve Chair Jerome Powell indicated a likely interest rate cut in September, the first in over four years. Financial advisors suggest little action for well-diversified investors, like those in target-date funds. With lower rates expected, adjustments to cash and fixed income holdings may be necessary, but tweaking stock-bond allocations isn’t recommended.

Lowering rates would benefit stocks and ease pressures on the U.S. economy. Yet, investors shouldn’t make wholesale changes due to Powell’s statement. Advisors advise locking in high guaranteed rates on cash now, as lower returns are expected with declining interest rates. Duration of five to 10 years is likely suitable for many investors at this time.

Read more: How investors can prepare for lower interest rates