Fed Rate Cut – Target Probabilities at the Fed’s FOMC Sept. 18 Meeting Today, traders see a 21.2% probability of a 50-bps rate cut and a 78.8% probability of a 25-bps rate cut at the Fed’s FOMC September 18 meeting. Picture source: CME Group
Performance of S&P 500 Around the First Late-Cycle Rate Cut After the first-rate late-cycle cut, the S&P 500’s performance is generally not exceptional. Picture source: Societe Generale Asset Research
Performance of S&P 500 Around the First-Rate Cut After the first-rate cut, the S&P 500’s performance is much better in mid-cycle than in late-cycle. Picture source: Societe Generale Asset Research
How Does A First Rate Cut Affect the Stock Market? Since 1970, the first rate cut has been bullish for the S&P 500 for the next 12 months, with recession and no recession. Picture source: Fidelity Management and Research
Stock Market Around First Rate Cut: Recession vs. No Recession The chart shows that the Dow Jones Industrial Average reacts positively to Fed first rate cuts. Picture source: Ned Davis Research
U.S. Equities – One Year Return After a Fed Rate Cut The chart shows how U.S. equities have historically performed after a 25 bps and 50 bps Fed rate cut over the last 35 years. You may also like “First Fed Rate Cut.” Picture source: Ycharts
Growth/Value Stock Ratio Around First Rate Cut: Recession vs. No Recession After first Fed rate cut and no recession within the next 12 months, growth stocks should outperform value stocks. Picture source: LPL Financial LLC
S&P 500 Returns After Rate Cuts Near Highs Since 1980, the Fed has cut rates 17 times (S&P 500 within 2% of new highs). One year later, the S&P 500 was still higher. Picture source: Ryan Detrick, LPL Financial LLC
Russel 2000 Index/Russel 1000 Index Around First Fed Rate Cut: Recession vs. No Recession Another great chart suggesting no recession in the next 12 months, and large caps should outperform small caps. Picture source: Ned Davis Research
Large-Cap Growth/Value Equity Series Ratio Around First Rate Cut: Recession vs. No Recession The chart suggests no recession in the next 12 months, and growth should outperform value. Picture source: Ned Davis Research
