Performance of S&P 500 Around the First-Rate Cut The S&P 500 typically shows strong performance following the Fed’s first rate cut, when the U.S. economy avoids a recession during the next 12 months. Image: MarketDesk Research
Number of Global Central Bank Rate Cuts Central banks globally are responding to slowing inflation and the need to stimulate economic growth by cutting interest rates at an unprecedented pace since the COVID-19 pandemic. Image: BofA Global Investment Strategy
S&P 500 Pre and Post Fed Rate Cuts The performance of the S&P 500 following the Fed’s first rate cut has historically been robust, but this trend is closely tied to the state of the U.S. economy, particularly regarding the risk of recession. Image: Goldman Sachs Global Investment Research
Market Pricing of Fed Rate Cuts BofA expects the Fed to cut another 75bp this year, consistent with market pricing, particularly in light of recent economic conditions and the Fed’s recent decision to cut rates by 50bp. Image: BofA Global Research
Number of Trading Days Since Last Fed Rate Cut The Fed’s recent decision to cut interest rates for the first time in four years, in response to changing economic conditions, marks the second-longest wait for such a reduction in history. Image: Morgan Stanley Wealth Management
Fed Rate Cuts Goldman Sachs forecasts a series of 25bp interest rate cuts through mid-2025, aimed at supporting economic growth amid fluctuating inflation rates. Image: Goldman Sachs Global Investment Research
Factor Performance Prior and After the First Fed Rate Cut Historically, the first rate cuts by the Federal Reserve during easing cycles have tended to favor Growth over Value, Small over Large, and Bonds over Stocks. Image: BofA US Equity & Quant Strategy
Small-Cap Stocks Relative Performance vs. Large-Cap Stocks Around the First Fed Rate Cut Small-caps often outperform large-caps in the 6 months following the first Fed rate cut, driven by lower interest rates and a market preference for smaller companies during economic recoveries. Image: BofA US Equity & Quant Strategy
Median Index Returns Following First Fed Rate Cut Historically, midcaps have outperformed the S&P 500 and the Russell 2000 in the three and twelve months following the initial Federal Reserve rate cut. Image: Goldman Sachs Global Investment Research
Interest Rates – Cumulative Rate Cuts vs. Hikes In 2024, global central banks are expected to implement significant policy rate cuts, marking it as the third largest year for such reductions in history, driven by falling inflation and the need to support economic growth. Image: BofA Global Investment Strategy