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
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
Fed Rates Cut Since the Fed’s last hike in July 2023, their ongoing 10-month pause is exceeding the average duration. Extended periods of “higher for longer” policies often lead to unfavorable outcomes. Image: Morgan Stanley Wealth Management
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
Dow Jones Industrial Average Returns Post Last Fed Rate Hike Is it advisable this time for U.S. equity investors to sell their holdings following the last Fed rate hike? Image: BofA Global Investment Strategy
Interest Rates – Probability of Fed Rate Hike The likelihood of the Federal Reserve holding interest rates steady in September has increased. Image: The Daily Shot
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