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
10-Year/2-Year Treasury Yield Curve Around First Fed Rate Cuts The U.S. yield curve typically steepens once the prospect of interest rate cuts by the Fed becomes more imminent, rather than when the Fed actually stops hiking rates. Image: Goldman Sachs Global Investment Research
S&P 500 After Initial Fed Rate Cuts Outside Of Recession Outside of recessions, U.S. stocks have tended to rise after the Fed’s first rate cut, with an average gain of 15% within 12 months. Image: BofA Predictive Analytics
First Major Fed Rate Cut – U.S. CPI vs. Unemployment Rate Can the Fed cut interest rates in response to the bank crisis? Image: Morgan Stanley Wealth Management
S&P 500 Around Emergency Fed Rate Cuts In recent history, the performance of the S&P 500 has been mixed after emergency Fed rate cuts. Image: Nordea and Macrobond
U.S. Emergency Fed Rate Cuts This charts puts the Fed’s emergency rate cut into perspective. Image: Oxford Economics
Fed Rate Cut – Overnight Indexed Swaps (OIS) Strip for FOMC Meetings over the Next 12 Months Traders see one more Fed interest rate cut this year. Image: Morgan Stanley Research
Range of Returns Two Years After Fed Rate Cut Historically, equities rally significally, when the Fed eases during soft patches. Image: Barclays Research
Break-Even Inflation Rate On 10-Year TIPS and Fed Rate Cut (Hike) If inflation expectations continue to fall or remain low, the Fed could probably cut rates further. Image: Gavekal
U.S.: Market Odds of A Fourth Rate Cut The Fed may be inclined to press the pause button in the “mid-cycle” policy easing. Image: Oxford Economics